APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022

17LIVE Inc. and its Subsidiaries
Consolidated Financial Statements
For the financial years ended 31 December 2020, 2021 and 2022

A-1

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Directors’ statement
For the financial years ended 31 December 2020, 2021 and 2022
In the opinion of the directors,(i)the accompanying consolidated financial statements of 17LIVE Inc. (the “Company”) and its
subsidiaries (collectively, the “Group”) are properly drawn up so as to give a true and fair viewof the consolidation financial positions of the Group as at 31 December 2020, 2021 and 2022,
and of the consolidated financial performance, consolidated changes in equity andconsolidated cash flows of the Group for each of the financial years ended 31 December 2020,2021 and 2022; and(ii)

at the date of this statement, there are reasonable grounds to believe that the Company will beable to pay its debts as and when they fall due.

On behalf of the Board of Directors:

Phua Jiexian Joseph
Director

Chua Joo HockDirector

9 November 2023

A-2

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Independent auditor’s report in relation to the audited consolidated financial statements of
17LIVE Inc. and its subsidiaries
For the financial years ended 31 December 2020, 2021 and 2022
The Board of Directors
17LIVE Inc.
4th Floor Harbour Place 103
South Church Street P.O. Box 10240
Grand Cayman, KY1-1002
Cayman Islands
Report on the audit of the financial statements
OpinionWe have audited the accompanying consolidated financial statements of 17LIVE Inc. (the“Company”) and its subsidiaries (collectively, the “Group”), which comprise the consolidated balance
sheets of the Group as at 31 December 2020, 2021 and 2022, the consolidated statements ofcomprehensive income, consolidated statements of changes in equity and consolidated statementsof cash flows for each of the financial years ended 31 December 2020, 2021 and 2022, and notes tothe consolidated financial statements, including a summary of significant accounting policies, as set
out on pages A-6 to A-83.
In our opinion, the accompanying consolidated financial statements of the Group are properly drawn
up in accordance with International Financial Reporting Standards (“IFRS”) so as to give a true andfair view of the consolidated financial positions of the Group as at 31 December 2020, 2021 and 2022
and of the consolidated financial performance, consolidated changes in equity and consolidated cash
flows of the Group for each of the financial years ended 31 December 2020, 2021 and 2022.
Basis for opinion
We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for theaudit of the financial statements section of our report. We are independent of the Group in accordancewith the Accounting and Corporate Regulatory Authority (“ACRA”) Code of Professional Conduct andEthics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethicalrequirements that are relevant to our audit of the financial statements in Singapore, and we havefulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Responsibilities of management and directors for the financial statements
Management is responsible for the preparation of consolidated financial statements that give a trueand fair view in accordance with IFRS, and for devising and maintaining a system of internal
accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against
loss from unauthorised use or disposition; and transactions are properly authorised and that they arerecorded as necessary to permit the preparation of true and fair financial statements and to maintainaccountability of assets.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends toliquidate the Group or to cease operations, or has no realistic alternative but to do so.
The directors’ responsibilities include overseeing the Group’s financial reporting process.

A-3

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Independent auditor’s report in relation to the audited consolidated financial statements of
17LIVE Inc. and its subsidiaries
For the financial years ended 31 December 2020, 2021 and 2022
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with SSAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users takenon the basis of these financial statements.
As part of an audit in accordance with SSAs, we exercise professional judgement and maintainprofessional scepticism throughout the audit. We also:x

Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.

x

Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.

x

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

xConclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going
concern.

x

Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.

x

Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the groupaudit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timingof the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.

A-4

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Independent auditor’s report in relation to the audited consolidated financial statements of
17LIVE Inc. and its subsidiaries
For the financial years ended 31 December 2020, 2021 and 2022

Restriction on distribution and use
This report is made solely to you as a body and for the inclusion in the Circular of Vertex Technology
Acquisition Corporation Ltd (“VTAC”) to be issued in connection with VTAC’s proposed acquisition of
the entire issued share capital of the Company, being a reverse takeover.

Ernst & Young LLP
Public Accountants andChartered Accountants
Singapore
9 November 2023
Partner-in-charge: Sharon Peh

A-5

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Consolidated statements of comprehensive income
For the financial years ended 31 December 2020, 2021 and 2022
(Expressed in United States Dollars)
Note

2020
US$

2021
US$

2022
US$

4
5

411,360,430(236,001,310)

497,782,292(310,035,338)

363,717,850(237,568,755)

Gross profit

175,359,120

187,746,954

126,149,095

Operating expenses
Selling expenses
General and administrative expenses
Research and development expenses(97,079,510)(49,786,248)(4,072,531)(129,179,652)(31,592,573)(16,609,117)(64,310,830)(24,402,012)(27,312,262)(150,938,289)(177,381,342)(116,025,104)

24,420,831

10,365,612

10,123,991

8
8(59,105,881)(12,554,312)

112,407,180(2,790,961)(55,860,150)
3,045,118

9(71,660,193)(974,233)

109,616,219(743,168)(52,815,032)(171,948)(72,634,426)

108,873,051(52,986,980)(48,213,595)(5,286,793)

119,238,663(9,727,770)(42,862,989)(8,153,842)(53,500,388)

109,510,893(51,016,831)

1,552,129––(51,948,259)

109,510,893(51,016,831)

Other comprehensive income:Items that may be reclassified to profit or loss
Foreign currency translation(211,943)(2,976,784)(3,951,456)

Items that will not be reclassified to profit or loss
Change in credit risk of financial liabilities atfair value through profit or loss

(175,000)(19,500)

700

Other comprehensive income for the year,
net of tax(386,943)(2,996,284)(3,950,756)

Total comprehensive income for the year

(52,335,202)

106,514,609(54,967,587)

Operating revenue
Cost of revenue

Total operating expenses

6

Operating income
Non-operating income and expenses
Other gains and losses- Revaluation (loss)/gain on financial
liabilities-Others

Finance costs
Total non-operating income and expenses(Loss)/profit before income tax
Income tax expense

10(Loss)/profit for the year from continuing
operations
Profit for the year from discontinued
operations

11(Loss)/profit for the year

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

A-6

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Consolidated statements of comprehensive income
For the financial years ended 31 December 2020, 2021 and 2022
(Expressed in United States Dollars)
Note(Loss)/income attributable to:
Owners of the Company- continuing operations- discontinued operations
Non-controlling interests
continuing operations

Total comprehensive income attributable to:
Owners of the Company- continuing operations- discontinued operations

Basic earnings per share
Owners of the Company- continuing operations- discontinued operations

2021
US$

2022
US$

(53,490,390)
1,552,129

109,510,893–(51,016,831)–(9,998)––(51,948,259)

109,510,893(51,016,831)(51,906,485)(428,717)

106,514,609–(54,967,587)–(52,335,202)

106,514,609(54,967,587)(1.05)
0.03

3.31
–

(1.35)–(1.02)

3.31(1.35)(1.05)
0.03(0.01)–(1.35)–(1.02)(0.01)(1.35)

12

Basic earnings per share
Diluted earnings per share
Owners of the Company- continuing operations- discontinued operations

2020
US$

12

Diluted earnings per share

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

A-7

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Consolidated balance sheets
As at 31 December 2020, 2021 and 2022
(Expressed in United States Dollars)
Note

2020
US$

2021
US$

2022
US$

13
14
15
16

1,686,922
8,688,274
30,529,783
3,169,184
3,403,741

2,017,633
8,114,534
28,424,508
2,194,774
3,645,149

795,789
1,848,265
26,543,128
1,537,813
3,696,046

47,477,904

44,396,598

34,421,041

1,473,165

4,457,704

3,369,559

144,745
1,277,185
32,678,926
92,491,374

108,8132,433,266
34,243,046
59,090,846–
2,325,918
24,053,674
39,259,309

Total current assets

128,065,395

100,333,675

69,008,460

Total assets

175,543,299

144,730,273

103,429,501

21
4

89,624,295
8,032,045

82,752,531
9,982,872

59,043,917
7,273,934

22

821,000
12,628,013
2,260,100
5,696,687
775,918
129,817

295,000
12,043,085
2,639,683
1,164,988
1,630,178
201,020

211,102,456
5,255,771
920,219–
893,360
106,744

119,967,875

110,709,357

284,596,401

ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Guarantee deposits
Total non-current assets
Current assets
Prepaid operating expenses
Financial assets at fair value throughprofit or loss
Other current assets
Trade and other receivables
Cash and cash equivalents

LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Financial liabilities at fair value throughprofit or loss
Income tax payable
Lease liabilities
Loans and borrowings
Provisions
Other current liabilities

17
18
19

14
23

Total current liabilities
Net current assets/(liabilities)
Non-current liabilities
Financial liabilities at fair value throughprofit or loss
Loans and borrowings
Deferred tax liabilities
Lease liabilities
Provisions

8,097,520

22
23
16
14

(10,375,682) (215,587,941)

278,664,192
1,161,649
1,939,550
7,423,678
223,135

154,948,006–
1,406,024
6,429,734
308,592––
855,590
1,012,263
164,036

Total non-current liabilities

289,412,204

163,092,356

2,031,889

Total liabilities

409,380,079

273,801,713

286,628,290

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

A-8

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Consolidated balance sheets
For the financial years ended 31 December 2020, 2021 and 2022
(Expressed in United States Dollars)
Note
EquityShare capital
Share premium
Other reserves
Accumulated deficit

25
26
27

2020
US$

2021
US$

2022
US$

2,876
3,792
3,792
21,383,500
25,409,440
25,409,440
8,959,154
1,100,037(2,010,481)(264,182,310) (155,584,709) (206,601,540)

Total equity(233,836,780) (129,071,440) (183,198,789)

Total liabilities and equity

175,543,299

144,730,273

103,429,501

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

A-9

A-10
–
–

Issuance of restricted share units
Disposal of subsidiaries
Repurchase and retirement of ordinary
sharesRepurchase of restricted share units
2,876

21,383,500(2,599) (19,321,989)
–
–

–
–

–

Accumulated
deficit
US$
Total
US$

(13,424,335)–––(51,948,259)–––(32,748,923)(490,450)

2,988,723–(52,335,202)(386,943)(175,000)(211,943)

8,959,154 (264,182,310) (233,836,780)–(490,450)

2,988,723–(386,943)(386,943)(175,000)(211,943)

6,847,824 (198,809,716) (151,250,928)–(51,948,259)(51,948,259)

Otherreserves
US$The accompanying accounting policies and explanatory notes form an integral part of the consolidated financial statements.

At 31 December 2020–

Total comprehensive income for the year

25–

Other comprehensive income for theyear, net of tax

24

–
–

–
–

–

40,705,489–

Sharepremium
US$

5,475
–

Note

Share
capitalUS$

At 1 January 2020
Loss for the year
Other comprehensive income:Change in credit risk of financial liabilities
at fair value through profit or loss
Foreign currency translation

2020(Expressed in United States Dollars)

Consolidated statements of changes in equity
For the financial years ended 31 December 2020, 2021 and 2022

17LIVE Inc. and its Subsidiaries

Total
equityUS$(32,748,923)(490,450)

2,988,723
606,629(52,345,200)(386,943)(175,000)(211,943)– (233,836,780)–––
606,629(9,998)–––(596,631) (151,847,559)(9,998)(51,958,257)

Noncontrollinginterests
US$

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022

A-11
3,792

(124)
–

25

25,409,440(925,537)––
4,951,477–

1,100,037–(1,834,077)

1,923,761(4,952,517)(2,996,284)(2,996,284)(19,500)(2,976,784)

8,959,154–

Other
reserves
US$
Total
US$

(1,838,953)(1,834,077)

1,923,761–

106,514,609(2,996,284)(19,500)(2,976,784)(155,584,709) (129,071,440)(913,292)–––

109,510,893–––(264,182,310) (233,836,780)
109,510,893
109,510,893

Accumulated
deficitUS$

The accompanying accounting policies and explanatory notes form an integral part of the consolidated financial statements.

At 31 December 2021

–
1,040

–

Total comprehensive income for the year
24–

Other comprehensive income for theyear, net of tax

Issuance of restricted share units
Share-based payments
Repurchase and retirement of ordinary
sharesRepurchase of restricted share units

–
–

–
–

–

21,383,500–

Sharepremium
US$

2,876
–

Note

Share
capitalUS$

At 1 January 2021
Profit for the year
Other comprehensive income:Change in credit risk of financial liabilities
at fair value through profit or loss
Foreign currency translation

2021(Expressed in United States Dollars)

Consolidated statements of changes in equity
For the financial years ended 31 December 2020, 2021 and 2022

17LIVE Inc. and its Subsidiaries

Total
equityUS$(1,838,953)(1,834,077)

1,923,761–

106,514,609(2,996,284)(19,500)(2,976,784)– (129,071,440)

–
–

–
–

–

–

–
–

– (233,836,780)–
109,510,893

Noncontrollinginterests
US$

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022

A-12
25,409,440––

Accumulated
deficitUS$–(51,016,831)–––(2,010,481) (206,601,540)

840,238(3,950,756)(3,950,756)

700(3,951,456)

1,100,037 (155,584,709)–(51,016,831)

OtherreservesUS$(183,198,789)

840,238(54,967,587)(3,950,756)

700(3,951,456)(129,071,440)(51,016,831)

Total
US$

The accompanying accounting policies and explanatory notes form an integral part of the consolidated financial statements.

3,792

–

Issuance of restricted stock units

At 31 December 2022–

Total comprehensive income for the year

–
–

–
–

–

25,409,440–

Sharepremium
US$

3,792
–

–

24

Note

Share
capitalUS$

Other comprehensive income for theyear, net of tax

At 1 January 2022
Loss for the year
Other comprehensive income:Change in credit risk of financial liabilities
at fair value through profit or loss
Foreign currency translation

2022(Expressed in United States Dollars)

Consolidated statements of changes in equity
For the financial years ended 31 December 2020, 2021 and 2022

17LIVE Inc. and its Subsidiaries

–

–

–

–

–
–

–
–

Noncontrollinginterests
US$(183,198,789)

840,238(54,967,587)(3,950,756)

700(3,951,456)(129,071,440)(51,016,831)

Total
equityUS$

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Consolidated statements of cash flows
For the financial years ended 31 December 2020, 2021 and 2022
(Expressed in United States Dollars)
2020
US$

2021
US$

2022
US$

Cash flows from operating activities(Loss)/profit before income tax from continuing operations (48,213,595) 119,238,663
Profit before income tax from discontinued operations
1,552,129–(42,862,989)–

Adjustments for:
Expected credit losses
Impairment of goodwill
Impairment of other intangible assets
Gain on disposal of subsidiaries
Loss on repurchase of preference shares
Depreciation expense
Amortisation expense
Loss on disposal of property, plant and equipment
Share-based payments
Revaluation loss/(gain) on financial liabilities
Finance costs
Loss/(gain) on termination of leases

652,863
516,189
10,594,732–
1,708,445–(1,292,787)––
2,708,549
2,709,947
2,868,002
3,176,250
2,217,357
414,804
197,3912,988,723
1,923,761
59,105,881 (112,407,180)
974,233
743,168
80,350––––––2,590,617
2,300,960
995,365
840,238
55,860,150
171,948(338,996)

Operating cash flows before changes in working capital

34,451,975

18,005,900

19,557,293

Changes in working capital
Trade and other receivables
Prepaid operating expenses
Other current assets
Trade and other payables
Other current liabilities
Contract liabilities
Provisions(19,820,226)(168,625)
990,789
50,627,470(768,638)
1,397,341
730,569(2,014,087)(2,984,539)(1,222,303)(6,871,764)
71,203
1,950,827
939,717

10,189,372
1,088,145
107,348(23,708,614)(94,276)(2,708,938)(881,374)

Cash flows from operations
Interest paid
Income tax paid

67,440,655(564,621)(156,886)

7,874,954(398,700)(10,388,203)

3,548,956(4,583)(14,008,601)

Net cash flows from/(used in) operating activities

66,719,148(2,911,949)(10,464,228)

Investing activities(Increase)/decrease in financial assets at fair value
through profit or loss
Purchase of property, plant and equipment
Purchase of intangible assets
Decrease/(increase) in guarantee deposits
Acquisition of a subsidiary
Disposal of subsidiaries(144,745)(1,475,026)(206,551)
711,818
3,889,743
668,886

35,932(1,051,686)(118,393)(241,408)––

108,813(438,061)(467,858)(50,897)––

Net cash flows from/(used in) investing activities

3,444,125(1,375,555)(848,003)

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

A-13

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Consolidated Statements of Cash Flows
For the financial years ended 31 December 2020, 2021 and 2022
(Expressed in United States Dollars)
2020
US$

2021
US$

2022
US$

28,100,000
328,000(1,095,629)
6,672,000(705,277)(32,748,923)(490,450)–(181,480)––(2,348,051)–(5,833,334)(1,838,953)(1,834,077)(14,563,055)(202,422)––(2,854,123)–(1,166,666)–––(164,210)(121,759)(26,619,892)(4,184,999)

Net increase/(decrease) in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at beginning of financial year

70,041,514
685,208
21,764,652(30,907,396)(2,493,132)
92,491,374(15,497,230)(4,334,307)
59,090,846

Cash and cash equivalents at end of financial year

92,491,374

59,090,846

39,259,309

Financing activities
Proceeds from issuance of preference shares
Proceeds from issuance of warrants
Repayments of principal portion of lease liabilities
Proceeds from loans and borrowings
Repayment of loans and borrowings
Repurchase and retirement of ordinary shares
Repurchase of restricted share units
Repurchase of preference sharesInterest paid
Net cash flows used in financing activities

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

A-14

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

1.

Corporate information
17LIVE Inc. (the “Company”) was incorporated as a Cayman Islands exempted company
with limited liability on 28 February 2017 under the Companies Act of the Cayman Islands,
under the name of M17 Entertainment Limited. On 23 September 2020, the Company
changed its name to 17LIVE Inc..
The registered office of the Company is located at 4th Floor, Harbour Place, 103 South
Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. The principal
place of business of the Company is located at 2-chǀme-12-28 Kitaaoyama, Minato City,Tǀkyǀ-to 107-006.
The Company and its subsidiaries (collectively, the “Group”) are principally engaged inoperating live streaming platform. Information on the subsidiaries is disclosed in Note 35.

2.

Summary of significant accounting policies

2.1

Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with
International Financial Reporting Standards (“IFRSs”) as issued by the International
Accounting Standards Board (“IASB”).
The consolidated financial statements have been prepared on the historical cost basis except
as disclosed in the accounting policies below.
The consolidated financial statements are presented in United States Dollars (“USD” or“US$”) except when otherwise indicated.
Going concern
As of 31 December 2022, the Group’s current and total liabilities exceeded its current andtotal assets by US$215,587,941 and US$183,198,789 respectively. Notwithstanding this, theconsolidated financial statements of the Group have been prepared on a going concern basis
due to the following:-

For the period from 1 January 2023 to 30 June 2023, the Group has generated positive
operating cash flows of US$3,988,445 and positive net cash flows of US$2,438,289;
As of 30 June 2023, the Group’s current assets exceeded its current liabilities by
US$2,314,977;
On 3 April 2023, the redemption date of all of the Group’s preference shares, whichamounted to US$210,515,456 as of 31 December 2022, has been extended to 31
December 2025;
The Group is expected to continue to generate positive operating cash flows andpositive net cash flows to pay its liabilities as and when they fall due for the next 12months from the issuance of the consolidated financial statements; andIn connection with but not conditional on the completion of the Proposed Acquisition of
the Group by Vertex Technology Acquisition Corporation Ltd, on 20 October 2023, theCompany’s shareholders approved, by way of an Extraordinary General Meeting, theconversion of the warrants and preference shares of the Group, which aggregated to
US$211,102,456, into equity. The conversion is expected to be take place before thecompletion of the Proposed Acquisition.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)2.2

Changes in accounting policies
The accounting policies have been consistently applied by the Group during the financial
years ended 31 December 2020, 2021 and 2022, except that during the financial years ended
31 December 2020, 2021 and 2022, the Group has adopted all the new and revised
standards that are effective for annual financial periods beginning on or after 1 January 2020,2021 and 2022 respectively. The adoption of these standards did not have any material effecton the financial performance or position of the Group.

2.3

Standards issued but not yet effective
The Group has not adopted the following standards applicable to the Group that have been
issued but are not yet effective:
Effective for annual
periods beginning on
or after

Description
Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies
Amendments to IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors: Definition of Accounting Estimates
Amendments to IAS 12 Income Taxes: Deferred Tax related toAssets and Liabilities arising from a Single Transaction
IFRS 17 Insurance Contracts
Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current
Amendments to IFRS 16 Leases: Lease Liability in a Sale andLeasebackAmendments to IAS 1 Presentation of Financial Statements:
Non-current Liabilities with Covenants
Amendments to IAS 21: Lack of Exchangeability

1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2024
1 January 2024
1 January 2024
1 January 2025

The directors expect that the adoption of the standards above will have no material impact
on the financial statements in the period of initial application.
2.4

Basis of consolidation and business combination(a)Basis of consolidation
The consolidated financial statements comprise the financial statements of theCompany and its subsidiaries as at the end of the reporting period. The financial
statements of the subsidiaries used in the preparation of the consolidated financial
statements are prepared for the same reporting date as the Company. Consistentaccounting policies are applied to like transactions and events in similar
circumstances.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.4

Basis of consolidation and business combination (cont’d)(a)Basis of consolidation (cont’d)Control is achieved when the Group is exposed, or has rights, to variable returns fromits involvement with the investee and has the ability to affect those returns through its
power over the investee. Specifically, the Group controls an investee if, and only if, theGroup has:-Power over the investee (i.e., existing rights that give it the current ability to direct
the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights results in control. To
support this presumption and when the Group has less than a majority of the voting or
similar rights of an investee, the Group considers all relevant facts and circumstancesin assessing whether it has power over an investee, including:-

The contractual arrangement(s) with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts andcircumstances indicate that there are changes to one or more of the three elements ofcontrol. Consolidation of a subsidiary begins when the Group obtains control over thesubsidiary and ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year
are included in the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (“OCI”) are
attributed to the equity holders of the parent of the Group and to the non-controllinginterests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries tobring their accounting policies in line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating totransactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, isaccounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets(including goodwill), liabilities, non-controlling interest and other components of equity,
while any resultant gain or loss is recognised in profit or loss. Any investment retained
is recognised at fair value.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.4

Basis of consolidation and business combination (cont’d)(b)Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred, which ismeasured at acquisition date fair value, and the amount of any non-controlling interestsin the acquiree. For each business combination, the Group elects whether to measure
the non-controlling interests in the acquiree at fair value or at the proportionate shareof the acquiree’s identifiable net assets. Acquisition-related costs are expensed as
incurred and included in administrative expenses.
The Group determines that it has acquired a business when the acquired set of
activities and assets include an input and a substantive process that together
significantly contribute to the ability to create outputs. The acquired process is
considered substantive if it is critical to the ability to continue producing outputs, andthe inputs acquired include an organised workforce with the necessary skills,
knowledge, or experience to perform that process or it significantly contributes to theability to continue producing outputs and is considered unique or scarce or cannot be
replaced without significant cost, effort, or delay in the ability to continue producing
outputs.
When the Group acquires a business, it assesses the financial assets and liabilities
assumed for appropriate classification and designation in accordance with thecontractual terms, economic circumstances and pertinent conditions as at theacquisition date. This includes the separation of embedded derivatives in hostcontracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised atfair value at the acquisition date. Contingent consideration classified as equity is notremeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability that is a financial instrument and within
the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes
in fair value recognised in profit or loss in accordance with IFRS 9. Other contingent
consideration that is not within the scope of IFRS 9 is measured at fair value at eachreporting date with changes in fair value recognised in profit or loss.
Goodwill is initially measured at cost (being the excess of the aggregate of theconsideration transferred and the amount recognised for non-controlling interests andany previous interest held over the net identifiable assets acquired and liabilities
assumed). If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Group re-assesses whether it has correctly identified allof the assets acquired and all of the liabilities assumed and reviews the procedures
used to measure the amounts to be recognised at the acquisition date. If thereassessment still results in an excess of the fair value of net assets acquired over theaggregate consideration transferred, then the gain is recognised in profit or loss.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.4

Basis of consolidation and business combination (cont’d)(b)Business combinations and goodwill (cont’d)After initial recognition, goodwill is measured at cost less any accumulated impairment
losses. For the purpose of impairment testing, goodwill acquired in a businesscombination is, from the acquisition date, allocated to each of the Group’s cashgenerating units that are expected to benefit from the combination, irrespective ofwhether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit (“CGU”) and part of theoperation within that unit is disposed of, the goodwill associated with the disposed
operation is included in the carrying amount of the operation when determining thegain or loss on disposal. Goodwill disposed in these circumstances is measured basedon the relative values of the disposed operation and the portion of the cash-generating
unit retained.

2.5

Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or
indirectly, to owners of the Company.
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss ofcontrol are accounted for as equity transactions. In such circumstances, the carrying
amounts of the controlling and non-controlling interests are adjusted to reflect the changes
in their relative interests in the subsidiary. Any difference between the amount by which the
non-controlling interest is adjusted and the fair value of the consideration paid or received isrecognised directly in equity and attributed to owners of the Company.

2.6

Foreign currency
The Group’s consolidated financial statements are presented in USD, which is also theCompany’s functional currency. Each entity of the Group determines its own functional
currency and items included in the financial statements of each entity are measured usingthat functional currency. The Group uses the direct method of consolidation and on disposalof a foreign operation, the gain or loss that is reclassified to profit or loss reflects the amountthat arises from using this method.
(a)Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at theirrespective functional currency spot rates at the date the transaction first qualifies forrecognition. Monetary assets and liabilities denominated in foreign currencies aretranslated at the functional currency spot rates of exchange at the reporting date.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.6

Foreign currency (cont’d)(a)Transactions and balances (cont’d)Differences arising on settlement or translation of monetary items are recognised in
profit or loss with the exception of monetary items that are designated as part of thehedge of the Group’s net investment in a foreign operation. These are recognised in
OCI until the net investment is disposed of, at which time, the cumulative amount is
reclassified to profit or loss. Tax charges and credits attributable to exchange
differences on those monetary items are also recognised in OCI.
Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rates at the dates of the initial transactions. Nonmonetary items measured at fair value in a foreign currency are translated using theexchange rates at the date when the fair value is determined. The gain or loss arisingon translation of non-monetary items measured at fair value is treated in line with therecognition of the gain or loss on the change in fair value of the item (i.e., translationdifferences on items whose fair value gain or loss is recognised in OCI or profit or loss
are also recognised in OCI or profit or loss, respectively).

(b)Consolidated financial statements
On consolidation, the assets and liabilities of foreign operations are translated into US
dollars at the rate of exchange prevailing at the reporting date and their statements ofprofit or loss are translated at exchange rates prevailing at the dates of the transactions.
The exchange differences arising on translation for consolidation are recognised in
OCI. On disposal of a foreign operation, the component of OCI relating to that particularforeign operation is reclassified to profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value
adjustments to the carrying amounts of assets and liabilities arising on the acquisition
are treated as assets and liabilities of the foreign operation and translated at the spot
rate of exchange at the reporting date.

2.7

Current and non-current classification
The Group presents assets and liabilities in the balance sheet based on current/non-current
classification. An asset is current when it is:-

Expected to be realised or intended to be sold or consumed in the normal operating
cycle
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period or
Cash or cash equivalent unless restricted from being exchanged or used to settle aliability for at least twelve months after the reporting period

All other assets are classified as non-current.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.7

Current and non-current classification (cont’d)
A liability is current when:-

It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period or
There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period

The terms of the liability that could, at the option of the counterparty, result in its settlementby the issue of equity instruments do not affect its classification.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.8

Property, plant and equipment
Construction in progress is stated at cost, net of accumulated impairment losses, if any. Plant
and equipment is stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. Such cost includes the cost of replacing part of the plant andequipment and borrowing costs for long-term construction projects if the recognition criteria
are met. When significant parts of plant and equipment are required to be replaced atintervals, the Group depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amountof the plant and equipment as a replacement if the recognition criteria are satisfied. All otherrepair and maintenance costs are recognised in profit or loss as incurred. The present valueof the expected cost for the decommissioning of an asset after its use is included in the costof the respective asset if the recognition criteria for a provision are met.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets,
as follows:
Office equipment
Leasehold improvements

2 to 5 years
3 to 5 years

Assets under construction included in property, plant and equipment are not depreciated asthese assets are not yet available for use.
An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss when the asset isderecognised.
The residual values, useful lives and methods of depreciation of property, plant andequipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.9

LeasesThe Group assesses at contract inception whether a contract is, or contains, a lease. Thatis, if the contract conveys the right to control the use of an identified asset for a period of timein exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for
short-term leases and leases of low-value assets. The Group recognises lease liabilities tomake lease payments and right-of-use assets representing the right to use the underlying
assets.
(i)

Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e.,the date the underlying asset is available for use). Right-of-use assets are measured
at cost, less any accumulated depreciation and impairment losses, and adjusted forany remeasurement of lease liabilities. The cost of right-of-use assets includes theamount of lease liabilities recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives received. Rightof-use assets are depreciated on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets, as follows:
Buildings
Motor vehicles

2 to 6 years
3 years

If ownership of the leased asset transfers to the Group at the end of the lease term or
the cost reflects the exercise of a purchase option, depreciation is calculated using theestimated useful life of the asset.
The right-of-use assets are also subject to impairment. The accounting policy for
impairment is disclosed in Note 2.11.
(ii)

Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease term. The
lease payments include fixed payments (including in-substance fixed payments) lessany lease incentives receivable, variable lease payments that depend on an index ora rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to
be exercised by the Group and payments of penalties for terminating the lease, if thelease term reflects the Group exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognised as
expenses (unless they are incurred to produce inventories) in the period in which theevent or condition that triggers the payment occurs.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.9

Leases (cont’d)Group as a lessee (cont’d)(ii)

Lease liabilities (cont’d)
In calculating the present value of lease payments, the Group uses its incremental
borrowing rate at the lease commencement date because the interest rate implicit in
the lease is not readily determinable. After the commencement date, the amount oflease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a change in the lease payments(e.g., changes to future payments resulting from a change in an index or rate used todetermine such lease payments) or a change in the assessment of an option topurchase the underlying asset.

(iii)

Short-term leases and leases for low-value assets
The Group applies the short-term lease recognition exemption to its short-term leasesof machinery and equipment (i.e., those leases that have a lease term of 12 months orless from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of officeequipment that are considered to be low value. Lease payments on short-term leases
and leases of low-value assets are recognised as expense on a straight-line basis overthe lease term.

2.10

Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost ofintangible assets acquired in a business combination is their fair value at the date ofacquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed
for impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an intangible asset with a finite
useful life are reviewed at least at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in
the asset are considered to modify the amortisation period or method, as appropriate, andare treated as changes in accounting estimates. The amortisation expense on intangible
assets with finite lives is recognised in profit or loss in the expense category that is consistent
with the function of the intangible assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment
annually, either individually or at the cash-generating unit level. The assessment of indefinite
life is reviewed annually to determine whether the indefinite life continues to be supportable.
If not, the change in useful life from indefinite to finite is made on a prospective basis.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.10

Intangible assets (cont’d)
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains
control) or when no future economic benefits are expected from its use or disposal. Any gainor loss arising upon derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in profit or loss.
(a)

Trademarks
Trademarks are stated at acquisition cost. Trademarks have a finite useful life and areamortised on a straight-line basis over their estimated useful lives of 1 to 10 years.

(b)

Technology
Technology is stated at acquisition cost and amortised on a straight-line basis over its
estimated useful life of 1 to 3 years.

(c)User baseUser base is stated at acquisition cost and amortised on a straight-line basis over its
estimated useful life of 1 to 4 years.

(d)Exclusive right to operate 17 app in Japan
Exclusive right is stated at acquisition cost and amortised on a straight-line basis overits estimated useful life of 5.5 years.

(e)

Domain
Domain is stated at acquisition cost and amortised on a straight-line basis over its
estimated useful life of 5 years.

2.11

Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset
may be impaired. If any indication exists, or when annual impairment testing for an asset isrequired, the Group estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in
use. The recoverable amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groupsof assets. When the carrying amount of an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time valueof money and the risks specific to the asset. In determining fair value less costs of disposal,
recent market transactions are taken into account. If no such transactions can be identified,an appropriate valuation model is used. These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded companies or other available fair value
indicators.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.11

Impairment of non-financial assets (cont’d)
The Group bases its impairment calculation on most recent budgets and forecast calculations,which are prepared separately for each of the Group’s CGUs to which the individual assets
are allocated. These budgets and forecast calculations generally cover a period of five years.
A long-term growth rate is calculated and applied to project future cash flows after the fifth
year.
Impairment losses of continuing operations are recognised in profit or loss.
For assets excluding goodwill, an assessment is made at each reporting date to determine
whether there is an indication that previously recognised impairment losses no longer existor have decreased. If such indication exists, the Group estimates the asset’s or CGU’s
recoverable amount. A previously recognised impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset’s recoverable amount since
the last impairment loss was recognised. The reversal is limited so that the carrying amountof the asset does not exceed its recoverable amount, nor exceed the carrying amount thatwould have been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in profit or loss unless the asset iscarried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Goodwill is tested for impairment annually as at end of the reporting period and whencircumstances indicate that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU(or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU
is less than its carrying amount, an impairment loss is recognised. Impairment losses relating
to goodwill cannot be reversed in future periods.

2.12

Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee
when it is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee.

2.13

Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and afinancial liability or equity instrument of another entity.
(a)Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured atamortised cost, fair value through OCI, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial
asset’s contractual cash flow characteristics and the Group’s business model for
managing them. With the exception of trade receivables that do not contain asignificant financing component or for which the Group has applied the practical
expedient, the Group initially measures a financial asset at its fair value plus, in thecase of a financial asset not at fair value through profit or loss, transaction costs.

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APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.13

Financial instruments (cont’d)(a)Financial assets (cont’d)
Initial recognition and measurement (cont’d)
In order for a financial asset to be classified and measured at amortised cost or fairvalue through OCI, it needs to give rise to cash flows that are ‘solely payments ofprincipal and interest’ (“SPPI”) on the principal amount outstanding. This assessment
is referred to as the SPPI test and is performed at an instrument level. Financial assets
with cash flows that are not SPPI are classified and measured at fair value throughprofit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages
its financial assets in order to generate cash flows. The business model determines
whether cash flows will result from collecting contractual cash flows, selling thefinancial assets, or both. Financial assets classified and measured at amortised cost
are held within a business model with the objective to hold financial assets in order tocollect contractual cash flows while financial assets classified and measured at fairvalue through OCI are held within a business model with the objective of both holding
to collect contractual cash flows and selling.
Subsequent measurement
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective
interest (“EIR”) method and are subject to impairment. Gains and losses arerecognised in profit or loss when the asset is derecognised, modified or impaired.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the balance sheet atfair value with net changes in fair value recognised in profit or loss.
This category includes derivative instruments and listed equity investments which theGroup had not irrevocably elected to classify at fair value through OCI. Dividends onlisted equity investments are recognised as other income in profit or loss when the rightof payment has been established.
Derecognition
A financial asset is derecognised where the contractual right to receive cash flows fromthe asset has expired. On derecognition of a financial asset in its entirety, the difference
between the carrying amount and the sum of the consideration received and any
cumulative gain or loss that had been recognised in other comprehensive income fordebt instruments is recognised in profit or loss.

A-26

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.13

Financial instruments (cont’d)(b)Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans andborrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value
through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purposeof repurchasing in the near term. This category also includes derivative financial
instruments entered into by the Group that are not designated as hedging instruments
in hedge relationships as defined by IFRS 9. Separated embedded derivatives are alsoclassified as held for trading unless they are designated as effective hedging
instruments.
Gains or losses on liabilities held for trading are recognised in profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss
are designated at the initial date of recognition, and only if the criteria in IFRS 9 aresatisfied.
Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised
in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation
is included as finance costs in profit or loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another fromthe same lender on substantially different terms, or the terms of an existing liability aresubstantially modified, such an exchange or modification is treated as thederecognition of the original liability and the recognition of a new liability. The differencein the respective carrying amounts is recognised in profit or loss.

A-27

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.14

Impairment of financial instruments
The Group recognises an allowance for expected credit losses (“ECLs”) for all debt
instruments not held at fair value through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance with the contract and all the cash
flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale ofcollateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been asignificant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12 months (a 12-month ECL).
For those credit exposures for which there has been a significant increase in credit risk sinceinitial recognition, a loss allowance is required for credit losses expected over the remaining
life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach incalculating ECLs. Therefore, the Group does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has
established a provision matrix that is based on its historical credit loss experience, adjusted
for forward-looking factors specific to the debtors and the economic environment.

2.15

Cash and cash equivalents
Cash and cash comprise cash at banks and on hand and short-term highly liquid deposits
with a maturity of three months or less, that are readily convertible to a known amount ofcash and subject to an insignificant risk of changes in value.
For the purpose of the consolidated statements of cash flows, cash and cash equivalents
consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts
as they are considered an integral part of the Group’s cash management.

2.16

Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of theamount of the obligation. When the Group expects some or all of a provision to be reimbursed,
for example, under an insurance contract, the reimbursement is recognised as a separate
asset, but only when the reimbursement is virtually certain. The expense relating to a
provision is presented in profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time is recognised as a finance
cost.

A-28

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.17

Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use or saleare capitalised as part of the cost of the asset. All other borrowing costs are expensed in the
period in which they occur. Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.

2.18

Convertible preference shares
Convertible preference shares with conversion option are accounted for as financial liability
with an embedded equity conversion derivative based on the terms of the contract. On
issuance of the convertible preference shares, the Group has elected to measure the entire
instrument at fair value, with subsequent changes in fair value recognised in profit or loss.
When a conversion option is exercised, the financial liability is derecognised with acorresponding recognition of share capital.

2.19

Employee benefits(a)Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of thecountries in which it has operations. Contributions to defined contribution plans arerecognised as an expense in the period in which the related service is performed.

(b)

Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of thebenefits expected to be paid in respect of service rendered by employees. They arerecognised as an expense in the period in which the related service is performed.

2.20

Share-based payments
Employees (including senior executives) of the Group receive remuneration in the form ofshare-based payments, whereby employees render services in exchange for equity
instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the
grant is made using an appropriate valuation model, further details of which are given in Note
24.
That cost is recognised in employee benefits expense (Note 7), together with acorresponding increase in equity (other capital reserves), over the period in which the service
and, where applicable, the performance conditions are fulfilled (the vesting period). The
cumulative expense recognised for equity-settled transactions at each reporting date untilthe vesting date reflects the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately vest. The expense orcredit in profit or loss for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.

A-29

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.20

Share-based payments (cont’d)Equity-settled transactions (cont’d)Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the conditions being met
is assessed as part of the Group’s best estimate of the number of equity instruments that will
ultimately vest. Market performance conditions are reflected within the grant date fair value.
Any other conditions attached to an award, but without an associated service requirement,
are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fairvalue of an award and lead to an immediate expensing of an award unless there are also
service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market
performance and/or service conditions have not been met. Where awards include a market
or non-vesting condition, the transactions are treated as vested irrespective of whether themarket or non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised
is the grant date fair value of the unmodified award, provided the original vesting terms of theaward are met. An additional expense, measured as at the date of modification, is recognised
for any modification that increases the total fair value of the share-based payment transaction,or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by
the counterparty, any remaining element of the fair value of the award is expensed
immediately through profit or loss.

2.21

Non-current assets held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale if their carrying
amounts will be recovered principally through a sale transaction rather than throughcontinuing use. Non-current assets and disposal groups classified as held for sale aremeasured at the lower of their carrying amount and fair value less costs to sell. Costs to sell
are the incremental costs directly attributable to the disposal of an asset (disposal group),
excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly
probable, and the asset or disposal group is available for immediate sale in its present
condition. Actions required to complete the sale should indicate that it is unlikely thatsignificant changes to the sale will be made or that the decision to sell will be withdrawn.
Management must be committed to the plan to sell the asset and the sale expected to becompleted within one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or amortised onceclassified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items inthe balance sheet.

A-30

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.21

Non-current assets held for sale and discontinued operations (cont’d)
Discontinued operations are excluded from the results of continuing operations and arepresented as a single amount as profit or loss after tax from discontinued operations in profit
or loss.
Additional disclosures are provided in Note 11. All other notes to the financial statements
include amounts for continuing operations, unless indicated otherwise.

2.22

Revenue
The Group generates revenue from live streaming and live-commerce. Revenue from live
streaming is generated from the “17LIVE” platform. Revenue is recognised upon transfer ofthe promised virtual items to the users.
The Group operates live streaming with virtual points system where users can directly
purchase virtual points or membership subscription on platforms or pay via online payment
systems provided by third parties including payments using mobile phone, internet
debit/credit card payment and other third party payment systems. The virtual points can besolely used to convert into virtual items on live streaming channels. Virtual points sold but
not yet consumed by the purchasers are recorded as “Contract liabilities” and upon
conversion, is recognised as revenue. Users are generally not entitled to any refund for thepurchase of such virtual points and virtual items.
Virtual points can be sold in bundled packages, and the sales price is proportionally allocatedto each virtual point based on the total package price, and recognised as revenue upon
utilisation.
Any virtual points purchased by a user in Japan and not used will expire after a year andrevenues from these virtual points will be recognised by the Group at such time. For users inother countries, any virtual points purchased do not expire.
Live streaming
Revenue from live streaming is generated from the “17LIVE” platform. The Group createsand offers virtual items to be purchased by users on live streaming channels, which the Group
operates and maintains. Users are required to first purchase virtual points and use thosevirtual points to purchase virtual items based on specified prices as predetermined by theGroup. Users purchase virtual items from the Group and gift them to performers (i.e. live
streamers and V-Livers) to show support for their favourite performers.
Virtual points are removed from users’ wallets and extinguished after being consumed by theusers (i.e. by way of virtual gifting to the performers). Accordingly, amounts received from thesale of virtual points are first recorded as contract liabilities. For virtual items, revenue isrecognised upon consumption by the users. The Group does not have further obligations tothe user after the virtual items are consumed.

A-31

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.22

Revenue (cont’d)
Live streaming (cont’d)
The Group recognises revenue on a gross basis from the sale of virtual items on the platform,
as the Group produces and controls virtual items before they are transferred to the users,
the prices of virtual items are set by the Group, and the Group is also exposed to the related
credit risk, which is generally not recoverable from the performers.
In order to attract user traffic, the Group shares revenues with performers in accordance withthe revenue sharing arrangements with the Group. The portion of revenue shared with theperformers are accounted for as cost of revenue by the Group. If virtual points are provided
to users free of charge for marketing purpose, the Group does not recognise any revenue
when users convert it to virtual items. Based on the Group's revenue sharing arrangements,
the expected amount to be paid to the live streamers when such free virtual points are utilised
is recognised as cost of revenue.
Users can join the fan group of their favourite live streamers and become part of their corecommunity by paying a subscription fee on a monthly basis and becoming an “armysubscriber”. The subscription fee is collected upfront from subscribers. The receipt of therevenue is initially recorded as contract liabilities and revenue is recognised over the periodof the subscription.
Live-commerce
The Group operates its live commerce business through HandsUp, a platform that allows
merchants to sell their products through live streaming in Japan, and OrderPally, a businessto-business live commerce matching and order management platform connecting merchantsand users in Taiwan. Revenue from live-commerce is recognised in the period in which theservices are rendered.

2.23

Cost of revenue
Cost of revenue relates to direct expenses incurred in order to generate revenue. Such costs
are recorded as incurred. Cost of revenues consists primarily of (i) revenue sharing fees andcontent costs, including cash payments to various performers and content providers, (ii)server and bandwidth costs, (iii) channel costs, (iv) commission costs, and (v) other costs
such as amortisation/impairment of intangible assets.

2.24

Taxes
(a)

Current income tax
Current income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used tocompute the amount are those that are enacted or substantively enacted at thereporting date in the countries where the Group operates and generates taxable
income.
Current income tax relating to items recognised directly in equity is recognised in equity
and not in profit or loss. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject tointerpretation and establishes provisions where appropriate.

A-32

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.24

Taxes (cont’d)(b)Deferred tax
Deferred tax is provided using the liability method on temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:-

When the deferred tax liability arises from the initial recognition of goodwill or an
asset or liability in a transaction that is not a business combination and, at thetime of the transaction, affects neither the accounting profit nor taxable profit orloss; and-In respect of taxable temporary differences associated with investments in
subsidiaries, where the timing of the reversal of the temporary differences canbe controlled and it is probable that the temporary differences will not reverse in
the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carryforward of unused tax credits and any unused tax losses. Deferred tax assets arerecognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised, except:-

When the deferred tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is nota business combination and, at the time of the transaction, affects neither theaccounting profit nor taxable profit or loss; and-In respect of deductible temporary differences associated with investments in
subsidiaries, deferred tax assets are recognised only to the extent that it isprobable that the temporary differences will reverse in the foreseeable future andtaxable profit will be available against which the temporary differences can beutilised.

The carrying amount of deferred tax assets is reviewed at each reporting date andreduced to the extent that it is no longer probable that sufficient taxable profit will beavailable to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting date and are recognised to theextent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
In assessing the recoverability of deferred tax assets, the Group relies on the same
forecast assumptions used elsewhere in the financial statements and in othermanagement reports, which, among other things, reflect the potential impact ofclimate-related development on the business, such as increased cost of production asa result of measures to reduce carbon emission.

A-33

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

2.

Summary of significant accounting policies (cont’d)

2.24

Taxes (cont’d)(b)Deferred tax (cont’d)Deferred tax assets and liabilities are measured at the tax rates that are expected toapply in the year when the asset is realised or the liability is settled, based on tax rates(and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss. Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying the criteria
for separate recognition at that date, are recognised subsequently if new information
about facts and circumstances change. The adjustment is either treated as a reduction
in goodwill (as long as it does not exceed goodwill) if it was incurred during themeasurement period or recognised in profit or loss.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has alegally enforceable right to set off current tax assets and current tax liabilities and thedeferred tax assets and deferred tax liabilities relate to income taxes levied by thesame taxation authority on either the same taxable entity or different taxable entities
which intend either to settle current tax liabilities and assets on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each future period in whichsignificant amounts of deferred tax liabilities or assets are expected to be settled or
recovered.

(c)

Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:-

2.25

Where the sales tax incurred on a purchase of assets or services is notrecoverable from the taxation authority, in which case the sales tax is recognisedas part of the cost of acquisition of the asset or as part of the expense item asapplicable; andReceivables and payables that are stated with the amount of sales tax included.

Share capital and share issuance expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity.
Incremental costs directly attributable to the issuance of ordinary shares are deductedagainst share capital.

A-34

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

3.

Significant accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management tomake judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of eachreporting period. Uncertainty about these assumptions and estimates could result inoutcomes that require a material adjustment to the carrying amount of the asset or liability
affected in the future periods.
Judgements made in applying accounting policies
Management is of the opinion that there is no significant judgement made in applying theaccounting policies.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty
at the end of the reporting period are discussed below. The Group based its assumptions
and estimates on parameters available when the financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change
due to market changes or circumstances arising beyond the control of the Group. Suchchanges are reflected in the assumptions when they occur.
(a)

Impairment of goodwill
As disclosed in Note 15 to the financial statements, the recoverable amounts of the
cash generating units which goodwill has been allocated to are determined based onvalue in use calculations. The value in use calculations are based on a discounted
cash flow models. The recoverable amount is most sensitive to the discount rate used
for the discounted cash flow model as well as the expected future cash inflows and thegrowth rate used for extrapolation purposes. The key assumptions applied in thedetermination of the value in use including a sensitivity analysis, are disclosed andfurther explained in Note 15 to the financial statements.
The carrying amount of goodwill as at 31 December 2020, 2021 and 2022 was
US$23,988,594.

(b)

Fair value measurement of preference shares
The fair value of convertible preference shares is determined by considering theGroup’s recent funding raising activities and the fair value assessment of comparable
companies at the end of the reporting period. The significant inputs used in thedetermination of the fair value of preference shares are disclosed and further explainedin Note 31 to the financial statements.
As at 31 December 2020, 2021 and 2022, the carrying amounts of the Group’s
convertible preference shares were US$278,664,192, US$154,848,006 andUS$210,515,456 respectively.

A-35

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

4.

Revenue
2020
US$
Revenue from contracts with customers
Liver live streaming
V-liver live streaming
Others

2021
US$

2022
US$

406,898,863 489,706,591 354,586,643
2,913,798
3,326,483
3,106,889
1,547,769
4,749,218
6,024,318
411,360,430 497,782,292 363,717,850

Timing of revenue recognition
At a point in time
Over time

401,911,357 460,922,499 342,481,479
9,449,073 36,859,793 21,236,371
411,360,430 497,782,292 363,717,850

Other revenue primarily comprises revenue from live-commerce and Wave App.
Contract liabilities
The Group has recognised the following contract liabilities in relation to revenue fromcontracts with customers:

Contract liabilities – Live streaming
Others

Revenue recognised that was included in thecontract liability balance at the beginning of
the year

A-36

2020
US$

2021
US$

2022
US$

7,915,083
116,962

9,738,664
244,208

6,893,091
380,843

8,032,045

9,982,872

7,273,934

5,928,670

6,050,964

6,516,064

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

5.

Cost of revenue
2020
US$

2021
US$

2022
US$

Revenue sharing fees and live streaming costs 175,878,003 236,934,848 172,687,179
Channel costs
47,301,659 51,058,641 39,792,535
Server and bandwidth costs
8,880,751 19,790,237 20,459,137
Others3,940,897
2,251,612
4,629,904
236,001,310 310,035,338 237,568,755

6.

Operating expenses

Marketing expenses
Employee benefits expense
Depreciation and amortisation
Professional fees
Software and service fees
Allowance for/(reversal of) expected credit
losses for trade receivables
Allowance for expected credit losses for otherreceivables
Others

2020
US$

2021
US$

2022
US$

78,397,416
44,332,902
5,886,197
9,666,111
2,338,816

98,654,366
49,071,515
5,085,359
9,788,004
4,311,587

41,718,767
47,068,722
4,891,577
8,959,292
6,110,094

330,262

516,189(1,756)322,601
9,663,984

í9,954,322

í
7,278,408

150,938,289 177,381,342 116,025,104

7.

Employee benefits expense

Wages and salaries
Contribution to defined contribution plans
Share-based payments
Labour and health insurance fees
Other personnel expenses

A-37

2020
US$

2021
US$

2022
US$

38,791,053
1,865,343
2,988,723
578,394
109,389

43,054,859
2,983,670
1,923,761
917,074
192,151

42,372,614
2,808,416
840,238
810,715
236,739

44,332,902

49,071,515

47,068,722

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

8.

Other gains and losses
2020
US$
Revaluation (loss)/gain on:- Preference shares- Warrants(58,858,881) 111,881,180(247,000)
526,000

Impairment of goodwill
Impairment of intangible assets
Loss on repurchase of preference shares
Loss on disposal of property, plant andequipment
Foreign exchange (loss)/gain(Loss)/gain on termination of leases
Refund of withholding tax
Others

9.

2021
US$

2022
US$
(55,568,150)(292,000)(59,105,881) 112,407,180 (55,860,150)(10,594,732)
íí
(1,708,445)
ííí
(2,708,549)
í(414,804)(1,209,154)(80,350)
1,733,894(280,721)(197,391)
567,685íí(452,706)(995,365)
2,826,708
338,996í
874,779(71,660,193) 109,616,219(52,815,032)

Finance costs
2020
US$

2021
US$

2022
US$

Interest expense on:- Loans and borrowings- Lease liabilities

785,983
181,480

538,686
202,422

6,261
164,210

Unwinding of discount on provisions

967,4636,770

741,108
2,060

170,471
1,477

Total finance costs

974,233

743,168

171,948

A-38

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

10.

Income tax expense
The major components of income tax expense recognised in profit or loss for the financial
years ended 31 December 2020, 2021 and 2022 were:
2020
US$

2021
US$

2022
US$

Current tax:
- Current year

7,994,490

9,573,143

8,282,905

Deferred tax:
- Origination and reversal of temporary
differences(2,707,697)

154,627(129,063)

Income tax expense recognised in profit orloss

5,286,793

9,727,770

8,153,842

Relationship between tax expense and accounting (loss)/profit
A reconciliation between tax expense and the product of accounting (loss)/profit multipliedby the applicable corporate tax rate for the financial years ended 31 December 2020, 2021
and 2022 were as follows:
2020
US$

2021
US$

2022
US$

(Loss)/profit before tax from continuing
operations
Profit before tax from discontinued operations(48,213,595) 119,238,663
1,552,129
í

(42,862,989)
í(Loss)/profit before tax(46,661,466) 119,238,663(42,862,989)

Tax at the domestic rates applicable tocountries where the Group operates
Adjustments:
Non-deductible expenses
Income not subject to taxation
Deferred tax assets not recognised
Others5,974,327

7,170,752

3,349,575

382(1,754,439)
757,988308,535

386,274(1,183,103)
3,371,859(18,012)3,902,921(1,699,868)
2,581,588
19,626

Income tax expense recognised in profit or loss

5,286,793

9,727,770

8,153,842

The above reconciliation is prepared by aggregating separate reconciliation for each national
jurisdiction. The Group principally operates in Taiwan and Japan, which have prevailing
corporate tax rates of 20% and 36.8%, respectively.

A-39

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

11.

Discontinued operations
The Group disposed 100% of its shareholding in subsidiaries, Paktor Pte. Ltd. (“Paktor”) and
Jendes Limited (“Jendes”) on 31 March 2020 and 30 April 2020 respectively. The disposals
were to enable the Group to better focus on its core business, i.e. live streaming. The
consideration paid was based on arm’s length negotiation between the parties and theacquirer was an independent third party.
As a result, the income and expenses of Paktor and Jendes are presented separately in the
consolidated statement of comprehensive income as “Profit from discontinued operations”
for the financial year ended 31 December 2020.
The major classes of assets and liabilities of Paktor and Jendes are as follows:
PaktorUS$

2020
Jendes
US$

Total
US$

Property, plant and equipment
Right-of-use assets
Intangible assets
Prepaid operating expenses
Other current assets
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Contract liabilities
Current lease liabilities
Loans and borrowings
Non-current lease liabilities

40,704
325,945
35,553
í
303,018
6,343,171
769,116(1,004,043)(4,063,381)(237,908)(208,551)(95,529)íí
3,437
15,857
10,544
11,02961,998(1,338,590)
íííí

40,704
325,945
38,99015,857
313,562
6,354,200
831,114(2,342,633)(4,063,381)(237,908)(208,551)(95,529)

Non-controlling interests

2,208,095
í(1,235,725)
606,629

972,370
606,629

Net assets/(liabilities) disposed

2,208,095(629,096)

1,578,999

Cash consideration received
Less: Cash and cash equivalents ofsubsidiaries disposed

1,500,000

í

1,500,000(769,116)(61,998)(831,114)

730,884(61,998)

668,886

1,500,000

í

1,500,000(2,208,095)

629,096(1,578,999)

1,371,786

í

1,371,786

663,691

629,096

1,292,787

Net cash inflow/(outflow) on disposal ofsubsidiaries
Cash consideration received
Less:
Net (assets)/liabilities disposed
Reclassification of foreign currency translation
reserve
Gain on disposal of subsidiaries

A-40

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

11.

Discontinued operations (cont’d)
Income statement disclosures:
PaktorUS$

2020
JendesUS$3,350,230(1,119,660)(1,018,926)(205,827)(727,515)
1,076
í

391,011(129,893)(132,476)(148,619)
íí(59)

3,741,241(1,249,553)(1,151,402)(354,446)(727,515)
1,076
(59)

Gain on disposal of subsidiaries

279,378
663,691(20,036)
629,096259,342
1,292,787

Profit from discontinued operations

943,069

609,060

1,552,129

Operating
Investing
Financing(766,002)
20,197(102,006)(41,829)íí(807,831)
20,197(102,006)

Net cash outflow(847,811)(41,829)(889,640)

Operating revenue
Cost of revenue
Selling expenses
General and administrative expenses
Research and development expenses
Other income
Oher expenses

Total
US$

Cash flow statement disclosures:

12.

Earnings per share(a)Basic earnings per share
Basic earnings per share is calculated by dividing the (loss)/profit attributable to ownersof the Company by the weighted average number of ordinary shares outstanding
during the financial year.
2020

2021

Continuing operations:(Loss)/profit attributable to owners of theCompany (US$)(53,490,390) 109,510,893

2022(51,016,831)

Weighted average number of ordinary
shares outstanding for basic earnings
per share computation

51,133,758

33,047,738

37,923,882

Basic earnings per share computation(US$ per share)(1.05)

3.31(1.35)A-41

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

12.

Earnings per share (cont’d)(a)Basic earnings per share (cont’d)
2020
Discontinued operations:
Profit attributable to owners of theCompany (US$)

(b)

2021

2022

1,552,129íí

Weighted average number of ordinary
shares outstanding for basic earnings
per share computation

51,133,758

íí

Basic earnings per share computation(US$ per share)

0.03

í

í

Diluted earnings per share
Diluted earnings per share is calculated by dividing profit attributable to owners of theCompany by the weighted average number of ordinary shares outstanding during thefinancial year plus the weighted average number of ordinary shares that would be
issued on the conversion of all the dilutive potential ordinary shares into ordinary
shares.
2020

2021

2022

Continuing operations:(Loss)/profit attributable to owners of theCompany (US$)(53,490,390) 109,510,893 (51,016,831)
Effects of dilution from:- Convertible preference shares andwarrants
í (112,407,180)
íWeighted average number of ordinary
shares outstanding for basic earnings
per share computation
Effects of dilution from:- Convertible preference shares- Warrants

Basic earnings per share computation(US$ per share)(53,490,390)(2,896,287) (51,016,831)

51,133,758

33,047,738

37,923,882

í 212,639,655
í
1,607,341

íí

51,133,758 247,294,734

37,923,882(1.05)(0.01)(1.35)The diluted earnings per share for discontinued operations for the financial years
ended 31 December 2020, 2021 and 2022 are the same as the basic earnings per
share.

A-42

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

12.

Earnings per share (cont’d)(b)Diluted earnings per share (cont’d)Convertible preference shares and warrants were excluded from the calculation ofdiluted earnings per share for the financial years ended 31 December 2020 and 31
December 2022 as they were anti-dilutive.
Employee share options and restricted stock units were excluded from the calculationof diluted earnings per share for the financial years ended 31 December 2020, 2021
and 2022 as they were anti-dilutive.

13.

Property, plant and equipment
Officeequipment
US$

LeaseholdConstruction
improvements in progress
US$
US$

Total
US$

Cost
At 1 January 2020
Additions
Acquisition of a subsidiary
Disposals
Disposal of subsidiaries
Transfer
Exchange differences

991,692
309,664
199,106–(437,586)–
57,624

1,326,529
143,715–(1,194,123)–
1,007,458
63,999

–1,021,647–––(1,007,458)
525

2,318,221
1,475,026
199,106(1,194,123)(437,586)–
122,148

At 31 December 2020 and
1 January 2021
Additions
Disposals
Transfer
Exchange differences

1,120,500
631,566(374,434)–(38,766)

1,347,578
420,120(154,711)
14,714
22,864

14,714––(14,714)–2,482,792
1,051,686(529,145)–(15,902)

At 31 December 2021 and1 January 2022
Additions
Disposals
Transfer
Exchange differences

1,338,866
268,355(506,951)–(112,808)

1,650,565
9,286(1,457,797)
152,735(122,039)–
160,420–(152,735)(243)

2,989,431
438,061(1,964,748)–(235,090)

987,462

232,750

7,442

1,227,654

At 31 December 2022

A-43

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

13.

Property, plant and equipment (cont’d)
Officeequipment
US$

LeaseholdConstruction
improvements in progress
US$
US$

Total
US$

Accumulated depreciation
At 1 January 2020
Depreciation
Disposals
Disposal of subsidiaries
Exchange differences

767,855
243,846–(396,882)
68,780633,111247,763(779,319)–
10,716–––––

1,400,966
491,609(779,319)(396,882)
79,496

At 31 December 2020 and
1 January 2021
Depreciation
Disposals
Exchange differences

683,599
223,642(297,894)
13,287112,271
265,598(33,860)
5,155

–
–
–
–

795,870489,240(331,754)
18,442

At 31 December 2021 and1 January 2022
Depreciation
Disposals
Exchange differences

622,634
286,252(439,300)(44,772)

349,164
211,919(530,083)(23,949)––––

971,798
498,171(969,383)(68,721)

At 31 December 2022

424,8147,051–

431,865

Net carrying amountAt 31 December 2020

436,901

1,235,307

14,714

1,686,922

At 31 December 2021

716,232

1,301,401–

2,017,633

At 31 December 2022

562,648

225,699

7,442

795,789

The property, plant and equipment were not pledged to others as collaterals.

A-44

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

14.

LeasesThe Group has lease contracts for buildings and motor vehicles. Leases of buildings
generally have lease terms between 2 to 6 years, while motor vehicles generally have leaseterms of 3 years. The Group is restricted from assigning and subleasing the leased assets.
There are no externally imposed covenants on these lease agreements.
The Group also has certain leases of billboards with lease terms of 12 months or less. The
Company applies the ‘short-term lease’ recognition exemptions for these leases.
(a)Right-of-use assets
The carrying amounts of right-of-use assets recognised and the movements during theyear are as follows:
Buildings
US$

Motor
vehicles
US$

Total
US$

At 1 January 2020
Additions
Disposals
Depreciation
Exchange differences

754,833
10,061,139(238,553)(2,218,338)
329,193–––––754,833
10,061,139(238,553)(2,218,338)
329,193

At 31 December 2020 and 1 January 2021
Additions
Depreciation
Exchange differences

8,688,274
1,669,619(2,378,762)
135,403––––8,688,274
1,669,619(2,378,762)
135,403

At 31 December 2021 and 1 January 2022
Additions
Disposals
Depreciation
Exchange differences

8,114,534
1,406,808(4,968,251)(2,088,371)(683,551)–
73,352–(4,075)(2,181)

8,114,534
1,480,160(4,968,251)(2,092,446)(685,732)

At 31 December 2022

1,781,169

67,096

1,848,265

The disposals of right-of-use assets during the financial year ended 31 December 2022
relates mainly to the Group’s relocation of its office premises in Taiwan.

A-45

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

14.

Leases (cont’d)(b)Lease liabilities
The carrying amount of lease liabilities and the movements during the year are as
follows:
2020
US$

2021
US$

2022
US$

At 1 January
Additions
Disposals
Accretion of interest
Payments
Exchange differences

619,894
9,952,315(158,203)
181,480(1,277,109)
365,401

9,683,778
1,576,671
í202,422(2,550,473)
157,019

9,069,417
1,480,160(5,307,247)
164,210(3,018,333)(455,725)

At 31 December

9,683,778

9,069,417

1,932,482

Current
Non-current

2,260,100
7,423,678

2,639,683
6,429,734

920,219
1,012,263

9,683,778

9,069,417

1,932,482

The disposals of lease liabilities during the financial year ended 31 December 2022
relates mainly to the Group’s relocation of its office premises in Taiwan.
(c)Amounts recognised in profit or loss
The amounts recognised in profit or loss in relation to leases are as follows:

Depreciation of right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases(included in general and administrative
expenses)
(d)

2020
US$

2021
US$

2022
US$

2,218,338
181,480

2,378,762
202,422

2,092,446
164,210757,651

155,744

50,702

Total cash outflows
For the financial years ended 31 December 2020, 2021 and 2022, the Group’s total
cash outflows for leases were US$2,034,760, US$2,706,217 and US$3,069,035
respectively.

A-46

15.

11,900,000––

11,900,000––
11,900,000

At 31 December 2021 and1 January 2022
AdditionsExchange differences

At 31 December 2022

11,900,000
–
–
–
–
–

A-47
550,380

554,090–(3,710)553,83755
198

513,008–
516,365(471,519)(5,434)
1,417

Exclusive rightto operate 17
app in Japan Trademarks
US$US$

At 31 December 2020 and
1 January 2021
AdditionsExchange differences

Cost
At 1 January 2020
Additions
Acquisition of a subsidiary
Disposals
Disposal of subsidiaries
Exchange differences

Intangible assets

Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

17LIVE Inc. and its Subsidiaries

7,411,539

7,411,539––

7,411,539––

11,975,669–
1,500,000(5,915,643)(147,178)(1,309)Technology
US$101,192,913

101,192,913––

101,192,913––

90,598,181–
10,594,732–––

Goodwill
US$7,656,174

7,557,942
117,267(19,035)

7,480,301
87,523(9,882)

8,338,122
53,432525,000(1,437,606)–
1,353

User baseUS$

485,794

192,068
350,591(56,865)

158,41730,815
2,836

48,270153,119–(48,270)–
5,298

DomainUS$

129,196,800

128,808,552
467,858(79,610)

128,697,007
118,393(6,848)123,373,250
206,551
13,136,097(7,873,038)(152,612)
6,759

Total
US$

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022

15.

3,425,757
2,163,636––––

5,589,393
2,163,636–

7,753,029
2,163,636–
9,916,665

6,310,607
4,146,971
1,983,335

At 31 December 2020 and
1 January 2021
Amortisation
Exchange differences

At 31 December 2021 and1 January 2022
Amortisation
Exchange differences

A-48

At 31 December 2022

Net carrying amountAt 31 December 2020

At 31 December 2021

At 31 December 2022

3,385

17,04020,431546,995

537,050
1,796
8,149

533,4063,709(65)

391,857
169,120(471,519)(1,997)445,945–

Exclusive rightto operate 17
app in Japan Trademarks
US$
US$

Accumulated amortisation andimpairment
At 1 January 2020
Amortisation
Disposals
Disposal of subsidiaries
Impairment loss
Exchange differences

Intangible assets (cont’d)Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

17LIVE Inc. and its Subsidiaries

–

–

–

7,411,539

7,411,539––

7,411,539––

11,938,808
500,000(5,915,643)(111,625)
1,000,000(1)

Technology
US$23,988,594

23,988,594

23,988,594

77,204,319

77,204,319––

77,204,319––

66,609,587–––
10,594,732–

GoodwillUS$

186,846

115,216

54,3797,469,328

7,442,726
29,305(2,703)

7,425,922
17,733(929)

8,308,354
292,674(1,437,606)–
262,500–

User baseUS$

380,968

156,687

155,772

104,826

35,381
106,223(36,778)

2,645
32,279457–
50,820(48,270)––
95

DomainUS$

26,543,128

28,424,508

30,529,783

102,653,672

100,384,044
2,300,960(31,332)

98,167,224
2,217,357(537)

90,674,363
3,176,250(7,873,038)(113,622)
12,303,177
94

Total
US$

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

15.

Intangible assets (cont’d)
The intangible assets were not pledged to others as collaterals.
Amortisation expense
The amortisation expense of intangible assets is included in “General and administrative
expenses” in profit or loss.
As of 31 December 2022, exclusive right has a remaining amortisation of less than one year.
Impairment testing of goodwill
Goodwill acquired through business combinations has been allocated to three cashgenerating units (“CGU”) for impairment testing as follows:-

17LIVE Japan Inc. (“17LIVE Japan)
Next Entertainment Global Holding (“MeMe”)
Ichi Nana Inc. (“Ichi Nana”)

The carrying amounts of goodwill allocated to each CGU are as follows:

17LIVE JapanMeMe
Ichi Nana

2020
US$

2021
US$

2022
US$

23,988,594
íí

23,988,594
íí

23,988,594
íí

23,988,594

23,988,594

23,988,594

17LIVE JapanFor 17LIVE Japan, the recoverable amount of the CGU has been determined based onvalue-in-use calculations using cash flow projections from financial budgets approved bymanagement covering a five-year period.
The key assumptions used for value-in-use calculations are as follows:

17LIVE Japan:
Gross margin
Terminal growth rate
Pre-tax discount rate

A-49

2020

2021

2022

48.00%
1.20%
35.00%

48.00%
1.20%
35.00%

50.00%
0.80%
25.00%

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

15.

Intangible assets (cont’d)
Impairment testing of goodwill (cont’d)Management determined budgeted gross margin based on past performance and its
expectations of market development. The weighted average growth rates used areconsistent with the forecasts included in industry reports. The discount rate used is pre-tax
and reflect specific risks relating to the CGU.
Sensitivity to changes in assumptions
With regards to the assessment of value-in-use for 17LIVE Japan, management believes
that no reasonably possible changes in any of the above key assumptions would cause thecarrying value of the CGU to materially exceed its recoverable amount.
MeMe
Impairment loss recognised
As of 31 December 2020, management assessed the recoverable amount for the MeMe
CGU based on fair value less costs of disposal, as the value-in-use method rendered anegative value-in-use for the MeMe CGU. As such, the fair value of the MeMe CGU wasdetermined based on the fair value of its assets and liabilities as of 31 December 2020. The
assets of the MeMe CGU mainly comprised current assets where carrying amounts
approximate fair value, and non-current assets where fair value was based on the secondary
market price.
During the financial year ended 31 December 2020, an impairment loss was recognised towrite-down the carrying amount of goodwill and other intangible assets attributable to the
MeMe CGU. The goodwill impairment loss of US$10,594,732 and impairment of
US$1,708,445 for other intangible assets has been recognised in profit or loss under “Other
gains and losses”.
During the financial years ended 31 December 2021 and 2022, management has assessedthat there were no indicators that the impairment of other intangible assets relating to the
MeMe CGU of US$1,708,445 should be reversed.
Ichi Nana
Impairment loss recognised
In the previous financial years, goodwill relating to the Ichi Nana CGU, which amounted to
US$66,609,587, had been fully impaired.

A-50

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

16.

Deferred tax assets and liabilities
Movements in deferred tax assets and liabilities during the financial years were as follows
2020
Net
Recognised
exchange31
in profit or Business
1 Januaryloss
combination differences December
Deferred tax assets:
Temporary differences:
Business tax
Accrued expenses
Contract liabilities
Unutilised tax losses
OthersDeferred tax liabilities:
Temporary differences:
Unrealised exchange
gain or loss
Business combination
Others

8,718
161,626
í
711,591
3,935

3,235
1,283,241
1,522,495(725,049)
75,485

í
í
í
í
í

589
53,72053,273
13,4582,867

12,542
1,498,587
1,575,768
í82,287885,870

2,159,407

í

123,9073,169,184

í
1,966,024
í363,559(1,006,964)
95,115

í
505,000
í

13,488í
3,328

377,047
1,464,060
98,443

1,966,024(548,290)

505,000

16,816

1,939,5502021
Net
Recognised
exchange31
in profit or Businessloss
combination differences December
1 January
Deferred tax assets:
Temporary differences:
Business tax
Accrued expenses
Contract liabilities
Other

Deferred tax liabilities:
Temporary differences:
Unrealised exchange
gain or loss
Business combination
Others12,542
1,498,587
1,575,768
82,287579,169
209,138(1,480,754)
7,939

í
í
í
í

(28,498)(166,288)(95,014)(102)

563,213
1,541,437
í90,124

3,169,184(684,508)í(289,902)

2,194,774

377,047
1,464,060
98,443(94,937)(501,964)
67,020

í
í
í

9,779
í
(13,424)

291,889
962,096
152,039

1,939,550(529,881)

í

(3,645)

1,406,024

A-51

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

16.

Deferred tax assets and liabilities (cont’d)2022
Net
Recognised
exchange31
in profit or Businessloss
combination differences December
1 January
Deferred tax assets:
Temporary differences:
Business tax
Accrued expenses
Other

Deferred tax liabilities:
Temporary differences:
Unrealised exchange
gain or loss
Business combination
Others563,213
1,541,437
90,124

3,955(308,496)(68,420)ííí

(72,710)(195,200)(16,090)

494,458
1,037,741
5,614

2,194,774(372,961)

í

(284,000)

1,573,813

291,889
962,096
152,039(61)(501,963)
íííí

(28,793)í
(19,617)

263,035
460,133
132,422

1,406,024(502,024)í

(48,410)855,590

The expiration dates of tax losses are as follows:

Within 5 years
5 to 10 years
More than 10 years
No expiry date

Unutilised tax losses not recognised asdeferred tax assets

2020
US$

2021
US$

2022
US$

47,167
15,627,858
932,908í

2,729,751
23,793,423
247,990
11,094,935

1,072,920
50,719,140
620,0026,550,862

16,607,933

37,866,099

58,962,924

16,607,933

37,866,099

58,962,924

2020
US$

2021
US$

2022
US$

15,217,274
410,584
980,075

23,425,708
367,715
14,072,676

50,719,140
í
8,243,784

16,607,933

37,866,099

58,962,924

A breakdown of the Group’s tax losses by country is as follows:

TaiwanJapan
OthersA-52

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

16.

Deferred tax assets and liabilities (cont’d)Unrecognised tax losses
At the end of the reporting period, the Group has tax losses of US$58,962,924 (2021:
US$37,866,099; 2020: US$16,607,933) that are available for offset against future taxable
profits of the companies in which the losses arose, for which no deferred tax asset isrecognised due to uncertainty of its recoverability. The use of these tax losses is subject tothe agreement of the tax authorities and compliance with certain provisions of the tax
legislation of the respective countries in which the companies operate. Tax losses in Japanand the United States of America cannot be carried forward if there is a change in controllingshareholder, while there are no similar restrictions imposed by the tax authorities in Taiwan
or Hong Kong.
Tax losses for companies in Taiwan can be carried forward for 10 years and tax losses forcompanies in Hong Kong have no expiry dates.

17.

Other current assets
Other current assets mainly pertain to income tax receivable.

18.

Trade and other receivables

Trade receivables
Less: Allowance for expected credit losses

Restricted deposits
Receivable from issuance of preference
sharesLoans to employees
Sales tax receivable
Other receivables

2020
US$

2021
US$

2022
US$

31,827,913(832,277)

34,211,638(1,374,897)

24,133,554(1,270,309)

30,995,636

32,836,741

22,863,245

464,037

465,690284,977

950,41181,651
83,065
104,126

830,411
í
24,96285,242

710,411
í
26,422
168,619

32,678,926

34,243,046

24,053,674

Trade receivables
Trade receivables are non-interest bearing and are generally on 20 to 60 days’ terms. They
are recognised at their original invoice amounts which represent their fair values on initialrecognition.
Loans to employees
Loans to employees are interest free, unsecured and repayable on demand. These loans
are extended to employees and do not require any form of collateral from the employees.
These loans have been fully repaid in 2021.

A-53

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

18.

Trade and other receivables (cont’d)Restricted deposits
Restricted deposits consist of term deposits placed with banks with maturity of more than 3months.
Expected credit losses
The movement in allowance for expected credit losses for trade receivables computed basedon lifetime ECL was as follows:
2020
US$

2021
US$

2022
US$

At 1 January
Charge for the year
Written back
Written off
Exchange differences

664,647
330,262í(149,551)(13,081)

832,277
516,189
íí
26,431

1,374,897
í(1,756)(16,928)(85,904)

At 31 December

832,277

1,374,897

1,270,309

No allowance for ECL has been recognised in respect of the financial year ended 31
December 2022 as management has determined that the allowance for ECL is insignificant.
The ageing analysis and ECLs for trade receivables are as follows:
2020
Gross
carrying
amountUS$

Lossallowance
provision
US$

2021
Gross
carrying
amountUS$

Lossallowance
provision
US$

2022
Gross
carrying
amountUS$

Lossallowance
provision
US$

Current
30,983,887
Less than 30 days
6,626
31 to 90 days
3,003
91 to 120 days
160
More than 120 days
834,237– 32,367,947–
195,661–
207,945–119832,277 1,439,966– 22,226,326–
583,363–
40,454–
í
1,374,897 1,283,411––––
1,270,309

31,827,913

832,277 34,211,638

1,374,897 24,133,554

1,270,309

The movement in allowance for expected credit losses for other receivables computed basedon 12-month ECL was as follows:
2020
US$

2021
US$

2022
US$

At 1 January
Charge for the year
Written offí322,601í322,601í
(5,872)

316,729í
(56,345)

At 31 December

322,601

316,729

260,384

A-54

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

19.

Cash and cash equivalents

Cash on hand
Cash at banks

2020
US$

2021
US$

2022
US$

143,592
92,347,782

99,60458,991,242

108,218
39,151,091

92,491,374

59,090,846

39,259,309

Cash at banks earns interest at floating rates based on daily bank deposit rates.
20.

Business combination
On 1 January 2020, the Group acquired Next Entertainment Global Holding and its
subsidiaries through the issuance of preference shares (AA shares) of US$12,219,300 andholdback shares of US$1,357,700. The primary reason for the acquisition is to leverage theGroup’s existing industry expertise, facilities, and personnel in order to maximise synergies
with respect to the acquisition and cooperative transaction.
The fair value of the identifiable assets and liabilities of Next Entertainment Global Holding
as at acquisition date were:
2020
US$
Property, plant and equipment
Intangible assets
Deferred tax assets
Prepaid operating expenses
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Contract liabilities
Other current liabilities
Deferred tax liabilities

199,106
2,541,365
312,683
167,347
1,221,598
3,889,743(2,962,908)(1,239,981)(641,685)(505,000)

Total identifiable net assets at fair value
Goodwill arising from acquisition

2,982,268
10,594,732

Purchase consideration

13,577,000

Purchase consideration
Less: Non-cash consideration

13,577,000(13,577,000)

Consideration settled in cash
Less: Cash and cash equivalents of subsidiary acquiredí(3,889,743)

Net cash inflow on acquisition

3,889,743

A-55

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

20.

Business combination (cont’d)
Transaction costs
Transaction costs related to the acquisition of US$78,081 have been recognised in “Generaland administrative expenses” in profit or loss for the financial year ended 31 December 2020.
Trade and other receivables acquired
The fair value of trade and other receivables acquired of US$1,221,598 also represents theirgross amounts. Subsequent to the acquisition, the Group has collected US$1,204,925 ofthese receivables, and recognised expected credit losses amounting to US$16,673.
Goodwill arising from acquisition
The goodwill of US$10,594,732 comprises the value of the expected synergies arising fromthe acquisition. None of the goodwill recognised is expected to be deductible for income tax
purposes.
Impact of the acquisition on profit or loss
From the acquisition date, Next Entertainment Global Holding has contributed
US$28,834,625 of operating revenue and US$597,277 to the Group’s profit for the year.

21.

Trade and other payables
2020
US$

2021
US$

2022
US$

Trade payables

41,945,318

48,259,219

33,747,088

Other payables
Accrued operating expenses
Sales tax payable
Withholding income tax

18,887,358
14,127,260
13,285,180
1,379,179

13,237,854
11,089,787
8,707,291
1,458,380

7,756,687
9,297,042
7,527,780
715,320

89,624,295

82,752,531

59,043,917

Trade payables are non-interest bearing and are normally settled on 45 to 60 days’ terms.

A-56

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

22.

Financial liabilities at fair value through profit or loss

Current items:
Warrants
Add: Fair value adjustment

Preference shares
Add: Fair value adjustment

Non-current items:
Preference shares
Add: Fair value adjustment

2020
US$

2021
US$

2022
US$

1,009,000(188,000)

1,009,000(714,000)

1,009,000(422,000)

821,000

295,000

587,000ííí 209,004,900
í
1,510,556

íí 210,515,456

821,000

295,000 211,102,456

217,294,556 209,004,900
61,369,636 (54,056,894)

íí

278,664,192 154,948,006

íThe Group recognised a net revaluation (loss)/gain on financial liabilities at fair value throughprofit or loss of $(59,105,881), $112,407,180 and $(55,860,150), and other comprehensive(loss)/gain of $(175,000), $(19,500) and $700 for changes in credit risk on financial liabilities
at fair value through profit or loss for the financial years ended 31 December 2020, 2021 and
2022, respectively.
Warrants
The transaction and contract information of warrants is as follows:(a)

In August 2017, concurrent with the Facility Loan, warrants were issued by theCompany which can be subscribed for a total of $225,000 worth of fully paid Series B
preference shares or to receive cash consideration. The warrants will expire ten years
after the date of the issuance.
Warrants are exercisable at the option of the holder any time before the expiration
date, for all or any part of the shares of warrant (but not for a fraction of a share) that
may be purchased.

(b)

In August 2017 and March 2018, concurrent with the drawdown of Facility A and
Facility B Loans, warrants were issued by the Company which can be purchased for a
total of $450,000 and $600,000 worth of the same type of shares issued in theupcoming financing round.
The warrants will expire six years after the date of the issuance. The warrants are
exercisable at the option of the holder, if and when an upcoming financing occurs onor before the expiration date, for all or any part of the shares of warrant (but not for afraction of a share) that may be purchased.

A-57

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

22.

Financial liabilities at fair value through profit or loss (cont’d)Warrants (cont’d)(c)

In January 2020, concurrent with the drawdown of Facility C Loans, warrants were
issued by the Company and the warrants can be purchased for a total of $700,000
worth of the same type of shares issued in the upcoming financing round.
The warrants will expire five years after the date of the issuance. The warrants are
exercisable at the option of the holder, if and when an upcoming financing occurs onor before the expiration date, for all or any part of the shares of warrant (but not for afraction of a share) that may be purchased.

Preference shares
The transaction and contract information of preference shares are as follows:(a)

In March 2017, the Group issued 73,610,098 shares of Series A convertible
redeemable preference shares (the “Series A Shares”) to facilitate the share swap forthe acquisition of Ichi Nana Inc.

(b)

In August 2017 and December 2017, the Company issued 25,199,948 shares of Series
B convertible redeemable preference shares (the “Series B Shares”) at $1.2964 pershare for cash consideration of US$32,669,213.

(c)

On 16 November 2018 and 28 February 2019, the Company entered into a
Subscription Agreement to allot and issue 16,927,635 and 4,780,000 Series C
convertible redeemable preference shares (the “Series C Shares”) for a total
consideration of US$20,000,000 and US$5,647,570, respectively.

(d)

In April, July, and September 2020, the Company issued 22,222,217 shares of Series
D convertible redeemable preference shares (the “Series D Shares”) at US$1.26 pershare for a total consideration of US$28,000,000.

(e)

On 1 January 2020, the Company issued 9,964,361 shares and 1,107,156 holdback
shares of Series AA convertible non-redeemable preference shares (the “Series AA
Shares”) at US$1.2263 per share to acquire 100% shareholding of Next Entertainment
Global Holding.

The rights, preferences and privileges of the preference shares are as follows:
Redemption rights(a)

If a qualified initial public offering has not occurred before the 3rd year anniversary of
the Series D shares issuance date, holders of any Series A, B, C and D Shares may
request redemption of the preference shares of such series. On receipt of a redemption
request from the holders, the Company shall redeem all or part, as requested, of theoutstanding preference shares of such series.

(b)

The redemption prices of the Series A, B, C and D Shares shall be the entry price andissuance price respectively plus compounded interest of 8% per annum computed on
the entry price and issuance price commencing from the relevant subscription date forsuch Series A, B, C and D Shares.

A-58

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

22.

Financial liabilities at fair value through profit or loss (cont’d)Preference shares (cont’d)
Redemption rights (cont’d)(c)

The shareholders of Series AA Shares have no redemption rights to the Company
based on the signed agreement. However, based on the Shareholders’ Agreement of
the Company, the Company is obliged to redeem all or part of Series AA Shares at theapplicable amount at any time on and after the occurrence of a “Liquidation Event”.
The requirement for the Company to deliver cash to the shareholders of Series AA
Shares upon the occurrence of a “Liquidation Event” may be beyond the control of theCompany, which caused the Company not having the unconditional right to avoid
delivering cash to settle Series AA Shares. As a result, the Company accounted for
the Series AA Shares as financial liabilities.
Liquidation Event is defined as (a) a liquidation, winding up or dissolution of theCompany; (b) a merger, consolidation, acquisition or sale or other transaction or series
related transactions of the Company where the shareholders do not retain control ofand a majority of the voting power in the surviving corporation; (c) a Trade Sale; or (d)an exclusive licensing of all or substantially all Intellectual Property Rights belonging
to the Group.

(d)

Subsequent to 31 December 2022, the redemption rights of all series of preference
shares have been extended to 31 December 2025.

Conversion rights(a)Each preference share is convertible, at the option of the holder, at any time after thedate of issuance of such preference shares (other than Series AA Share, whichcontains only automatic conversion term subject to point (c) below), according to aconversion ratio, subject to adjustments for dilution, including but not limited to stock
splits, stock dividends and capitalisation and certain other events. Each preference
share is convertible into a number of ordinary shares determined by dividing theapplicable original issuance price by the conversion price.

(b)

The conversion ratio of each Series of preference shares were adjusted upon theissuance of the latest preference share.

(c)Each preference share shall automatically be converted into ordinary shares, at thethen applicable preference share conversion price, upon closing of a qualified initialpublic offering.

Voting rights(a)Each preference share (other than Series AA Shares) shall have the same voting rights
as an ordinary share and shall carry one vote per preference share and shall be entitledto vote together with the ordinary shares on an “as-if converted” basis on all matterssubmitted to a vote of the shareholders of the Company. The holders of the preference
shares shall be entitled to receive notices of, and attend, speak and vote at, any
meetings of the shareholders of the Company.

(b)

The shareholders of Series AA Shares shall not have any voting rights and shall not
be entitled to speak or vote at, any meetings of the Shareholders, or act by writtenconsent.

A-59

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

22.

Financial liabilities at fair value through profit or loss (cont’d)Preference shares (cont’d)
Dividend rights

23.

(a)

The Series A to Series D preference shareholders rank pari passu with each other in
relation to claims and/or payment of dividends. The preference shareholders (otherthan Series AA Shares) shall be entitled to receive, in preference to any dividend on
the ordinary shares, non-cumulative dividends for each preference share at the rateequal to 8% of, as the case may be, the Series A preference share issue price, theSeries B preference share issue price, the Series C preference share issue price andthe Series D preference share issue price, for each respective preferred shareholder.
No dividend, whether in cash, in property, in shares in the Company or otherwise may
be declared or paid on any other class or series of shares unless and until the preferred
dividends are first paid in full.

(b)

The shareholders of Series AA Shares shall be entitled to receive, in preference to any
dividend on the ordinary shares, non-cumulative dividends if declared by the Board of
Directors. No dividend, whether in cash, in property, in shares in the Company orotherwise may be declared or paid on any other class or series of shares unless anduntil the preferred dividends are first paid in full.

Loans and borrowings
PeriodCurrent:
Loan

Non-current:
Loan

2020
US$

2021
US$

1 February 2020 1 February 2022

5,696,687

1,164,988

í

1 February 2020 1 February 2022

1,161,649

íí

6,858,336

1,164,988

íTotal loans and borrowings

2022
US$

In February 2020, one of the subsidiaries, Ichi Nana Inc. entered into a twenty-four-monthloan facility agreement with Innoven Capital Singapore Pte. Ltd., where a loan facility up to$7,000,000 was made available to Ichi Nana. The loan bears an interest rate of 9.25% perannum.

A-60

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

23.

Loans and borrowings (cont’d)
A reconciliation of liabilities arising from financing activities is as follows:
1 January
2020
Net cashflow
US$
US$

Accretionof interest
US$

Net addition/(disposal)US$í
181,480í
9,794,112

í
í

í
í

Accretionof interest
US$

Net addition/(disposal)US$139,986
202,422

í
1,576,671

Long term loans(including
current portion)
878,891 5,966,723
Lease liabilities
619,894 (1,277,109)
Financial liabilities
at fair value
through profit orloss:- Preference
shares178,053,311 28,100,000- Warrants
246,000
328,000

1 January2021
Net cashflow
US$
US$Long term loans(including
current portion)
6,858,336 (5,833,334)
Lease liabilities
9,683,778 (2,550,473)
Financial liabilities
at fair value
through profit orloss:- Preference
shares278,664,192 (14,563,055)- Warrants
821,000
í

1 January2022
Net cashflow
US$
US$Long term loans(including
current portion)
1,164,988
Lease liabilities
9,069,417
Financial liabilities
at fair value
through profit orloss:- Preference
shares154,948,006- Warrants
295,000íí

Non-cash changes
Fair value
Exchange
adjustment differences
US$US$

31 December
2020
US$

í
í

12,722
365,401

6,858,336
9,683,778

72,510,881(247,000)íí278,664,192
821,000

Non-cash changes
Fair value
Exchange
adjustment differences
US$US$

31 December
2021
US$

í
í

í
157,019

1,164,988
9,069,417

í (109,153,131)
í
(526,000)íí

154,948,006
295,000

Non-cash changes
Fair value
Exchange
adjustment differences
US$US$

31 December
2022
US$

Accretionof interest
US$

Net addition/(disposal)
US$(1,166,666)(3,018,333)

1,678
164,210

í
(3,827,087)

ííí
(455,725)

í
1,932,482

í
í

í
í

í
í

55,567,450
292,000íí

210,515,456
587,000

A-61

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

24.

Share-based payments
Employee share option plan
The employee share option plan commenced in March 2017, upon the closing of the shareswap among the Company, Paktor and Ichi Nana Inc. Under a share swap agreement, theCompany became the holding company of Paktor and acquired 53.8% interest of Ichi Nana
Inc.. Pursuant to the agreement, all share options and restricted share units of Paktor andIchi Nana Inc., vested or unvested, shall be assumed by the Company and converted intoshare options and restricted share units of the Company, subject to the same terms andconditions that are applicable to Paktor and Ichi Nana Inc.’s options and restricted share units(including expiration date, vesting conditions and exercise provisions).
The disposal of Paktor in March 2020 did not have any impact on the outstanding andexercisable (i.e. vested) options or restricted share units. To the extent any options or
restricted share units held by Paktor’s employees were vested at the time of the disposal,
such employees continued to hold such vested options and restricted share units.
The Company’s share options are subject to a 4-year service vesting condition with 25% of
the options becoming vested each year. Based on the terms of the award agreements withthe grantees, the awards granted under the employee share option plan can either be equitysettled or cash-settled, at the discretion of the Company. As of 31 December 2020, 2021 and
2022, the Company expects to settle the outstanding share options in shares. Since thecommencement of the employee share option plan, there has not been any settlement ofshare options in cash.
Movement of share options during the financial year
The following table shows the number (No.) and weighted average exercise prices (“WAEP”)
of, and movements in, share options during the financial year:
No.

2020
WAEP
US$

No.

2021
WAEP
US$

No.

2022
WAEP
US$

Outstanding at 1 January
and 31 December
699,9970.85

699,9970.85

699,997

0.85

Exercisable at
31 December

0.85

699,9970.85

699,9970.85

699,997

No share options were vested, granted, exercised or forfeited during the financial years
ended 31 December 2020, 2021 and 2022.
Fair value of share options granted
The fair value of share options granted is estimated at the date of the grant using a Binomial
option-pricing model, taking into account the terms and conditions upon which the options
were granted.

A-62

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

24.

Share-based payments (cont’d)Fair value of share options granted (cont’d)
The following table lists the inputs to the Binomial option pricing model for the financial years
ended 31 December 2020, 2021 and 2022.

Share price at grant date (US$)
Expected volatility (%)
Expected life of option (years)
Risk-free interest rate (% p.a.)

2020

2021

2022

0.416448
40.85

0.416448
40.85

0.416448
40.85

Restricted share units
The Company’s restricted share units are subject to a 2 to 4 year vesting condition with
12.5% and 25% becoming vested after the first year and the remaining being vested evenly
over the remaining periods between 12 to 36 months. The restricted share units granted by
the Company can only be settled by shares.
In 2020, the Company granted restricted share units to its employees subject to certain Initial
Public Offering and corporate transaction conditions and becoming vested after fulfilling thecondition. The restricted share units granted by the Company can only be settled by shares.
As at 31 December 2020, 2021 and 2022, no restricted share units were vested.
The Company’s restricted share units are subject to the achievement of performance
incentives, and vest based on the incentive for each year.
Movement of restricted share units during the financial year
The following table shows the movements in restricted share units during the financial year:
2020
Number of units

2021
Number of units

2022
Number of units

Outstanding at 1 January- Granted- Exercised- Repurchased- Forfeited

30,327,012
27,208,145
í
(500,000)(1,265,396)

55,769,761
3,155,856(10,404,605)(2,098,512)(5,520,577)

40,901,923
3,067,378
íí(15,677,819)

Outstanding at 31 December

55,769,761

40,901,923

28,291,482

Exercisable at 31 December

28,330,602

19,759,133

22,428,080

Fair value of restricted share units granted
The fair value of restricted shares units was determined using the market approach, making
reference to the transaction price of most recent round of financing.

A-63

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

24.

Share-based payments (cont’d)Restricted share units (cont’d)Fair value of restricted share units granted (cont’d)
The following table lists the inputs for the fair value measurement of restricted share units forthe financial years ended 31 December 2020, 2021 and 2022.

Transaction price (US$)

2020

2021

2022

1.18

1.26

1.26

Starting from 15 July 2015, the Board of Directors approved the issuance of restricted shares.
The relevant information is as follows:
Type of arrangement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement

Share price Number of Contract
Grant date on grant date shares/units periods
2015.07.15~
2016.12.16
2018.02.13

0.4597~0.47790.980

2018.04.01~
2019.10.01
2020.01.01~
2020.10.01
2020.10.01

0.70~
0.98099
0.47

Vesting
condition

4,550,611

4 years

Service period

13,942,929

4 years

Service period

15,755,122

2-4 years

Service period

11,523,840

4 years

Service period

0.47

8,626,368

Indefinite

2020.10.01

0.47

7,057,937

4 years2021.01.01~
2021.12.13
2022.01.01~
2022.12.1

0.56

3,155,856

4 years

IPO/Corporatetransaction
Performance
incentive
Service period

0.29

3,067,378

4 years

Service period

The expenses incurred on share-based payment transactions for the financial years ended
31 December 2020, 2021 and 2022 amounted to US$2,988,723, US$1,923,761 andUS$840,238 respectively.
25.

Share capital
Number of
Note shares (‘000)
At 1 January 2020
Repurchase and retirement of ordinary shares
At 31 December 2020 and 1 January 2021
Share-based payment
Repurchase and retirement of ordinary shares
At 31 December 2021, 1 January 2022 and
31 December 2022

A-64

US$

(a)

54,755(25,991)

5,475(2,599)(b)

28,764
10,405(1,245)

2,876
1,040
(124)

37,924

3,792

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

25.

Share capital (cont’d)(a)

In November 2020, the Company repurchased 25,991,209 ordinary shares and
500,000 restricted share units from one of its original founders based on the signed
share repurchase agreement. The repurchase price per share (per share unit) is set at
US$1.26, amounting to US$33,378,923 in total. The par value of the ordinary shares
is US$0.0001 per share.
Subsequent to 31 December 2022, on 5 September 2023, the Company and theoriginal founder entered into an agreement to waive the Company’s further obligations
under the share repurchase agreement, as well as the original founder’s rights to the699,997 share options and 699,997 restricted share units held by him, for an aggregate
consideration of US$1,920,000. The effects of this transaction have not been adjusted
for in these financial statements.

(b)

26.

In July and October 2021, the Company repurchased 1,244,998 ordinary shares for a
total consideration of US$1,838,953. The repurchased shares were subsequently
retired. The par value of the ordinary shares is US$0.0001 per share.

Share premium
Share premium pertains to the difference between the par value of the ordinary shares andthe consideration paid for the repurchase of ordinary shares or the exercise of the restricted
share units.

27.

Other reserves
2020
US$
Share-based payment reserve
Foreign currency translation reserve
Fair value reserve
Reorganisation reserve

2022
US$

19,966,539 15,103,706 15,943,944
1,672,999(1,303,785) (5,255,241)(175,000)(194,500)(193,800)(12,505,384) (12,505,384) (12,505,384)

Total
(a)

2021
US$

8,959,154

1,100,037(2,010,481)

Share-based payment reserve
Share-based payment reserve represent the equity settled share options and restricted
shares units granted to employees. The reserve is made up of the cumulative value ofservices rendered by employees recorded over vesting period commencing from grant
date and is reduced by the expiry or exercise of the share options or restricted share
units.

(b)

Foreign currency translation reserve
The foreign currency translation reserve represents exchange difference arising fromthe translation of the financial statements of foreign operations whose functional
currencies are different from that of the Group’s presentation currency.

A-65

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

27.

Other reserves(cont’d)(c)Fair value reserve
The change in credit risk of financial liabilities at fair value through profit or loss arerecorded in the fair value reserve.

(d)Reorganisation reserve
In March 2017, under a share swap agreement, all the existing shareholders of Paktor
exchanged their respective shares, including all of the ordinary and preference shares,for equivalent classes of shares of the Company on a 1 for 1.98 basis. The share swap
agreements were regarded as a reorganisation of entities. The difference between the
carrying amount of the Company and Paktor were recorded under reorganisation
reserve.

28.

Related party transactions
Key management compensation
2020
US$
Salaries and other short-term employee benefits
Share-based payment
Total

29.

2021
US$

2022
US$

630,965
852,767

1,171,712
1,221,858

1,035,856
304,270

1,483,732

2,393,570

1,340,126

Pledged assets
The Group’s assets pledged as collateral are as follows:

30.

2020
US$

Book value
2021
US$

Guarantee deposits

3,403,741

3,645,149

Restricted deposits

464,037

465,6903,867,778

4,110,839

2022
US$

Purpose3,696,046 Restricted deposits
pursuant to Japanese
Payment Services Act
284,977 Restricted deposits for
credit cards
3,981,023

Segment information
For management’s purpose, the Group is organised into two operating business segments,
namely:(a)(b)

Live streaming; andOthers, which include the business from live-commerce and Wave App.

A-66

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

30.

Segment information (cont’d)Management monitors the operating results of its business units separately for the purposeof making decisions about resource allocation and performance assessment. Segment
performance is evaluated based on operating profit or loss which in certain respects, as
explained in the table below, is measured differently from operating profit or loss in the
consolidated financial statements.
2020
Live
streaming
US$

OthersUS$409,812,661

1,547,769

í

411,360,430

Results:
Revaluation loss on financial
liabilities
Depreciation and amortisation
Impairment of goodwill
Finance costs
Income tax expenseí
(2,551,109)í(178,929)(6,953,139)

í
(16,903)í
(4,471)
í(59,105,881)(3,318,185)(10,594,732)(790,833)
1,666,346(59,105,881)(5,886,197)(10,594,732)(974,233)(5,286,793)

Segment profit/(loss)

60,171,977(3,017,071) (105,368,501)(48,213,595)

Assets:Additions to non-current assets
Segment assets

10,704,424
88,329,200

í
834,047

1,038,292
86,380,052

11,742,716
175,543,299

Segment liabilities

100,866,944

843,264

307,669,871

409,380,079

Revenue from external customers

Unallocated
US$

Total
US$

2021

Revenue from external customers

Livestreaming
US$

OthersUS$493,033,074

4,749,218

Unallocated
US$
í

Total
US$
497,782,292

Results:
Revaluation gain on financial
liabilities
Depreciation and amortisation
Finance costs
Income tax expenseí
(2,274,239)(188,721)(4,015,788)

Segment profit/(loss)

38,618,712(1,154,164)

81,774,115

119,238,663

Assets:Additions to non-current assets
Segment assets

2,408,938
88,027,853

í
3,175,927

430,760
53,526,493

2,839,698
144,730,273

Segment liabilities

99,450,890

1,366,651

172,984,172

273,801,713

A-67

í 112,407,180 112,407,180(1,796)(2,809,324)(5,085,359)
í(554,447)(743,168)í
(5,711,982)(9,727,770)

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

30.

Segment information (cont’d)
2022
Live
streaming
US$

OthersUS$357,693,532

6,024,318

í363,717,850

Results:
Revaluation loss on financial
liabilities
Depreciation and amortisation
Finance costs
Income tax expenseí
(2,029,420)(154,084)(2,014,411)

í
(564)
í
í

(55,568,150)(2,861,593)(17,864)(6,139,431)(55,568,150)(4,891,577)(171,948)(8,153,842)

Segment profit/(loss)

36,671,085(872,294)(78,661,780)(42,862,989)

Assets:Additions to non-current assets
Segment assets

1,212,201
52,671,386

23,716
3,933,990

1,150,162
46,824,125

2,386,079
103,429,501

Segment liabilities

57,142,617

1,637,230

227,848,443

286,628,290

Revenue from external customers

Unallocated
US$

Total
US$

The Group’s revenue and gross profit in local currency for Japan and Taiwan are as follows:2020
In localcurrency

JPY

Revenue
Gross profit

30,492,984,344
14,668,088,526

2021
TWD

JPY

2022
TWD

2,097,800,913 40,021,712,175
517,294,633 16,770,024,077

JPY

TWD

2,429,147,402 32,892,935,548
593,370,532 13,694,815,060

2,582,613,219
513,499,334

Reconciliations
Segment assets are reconciled to total assets as follows:
2020
US$

2021
US$

2022
US$

Segment assets for reportable segments
Other segment assets

88,329,200
834,047

88,027,853
3,175,927

52,671,386
3,933,990

Total segment assets

89,163,247

91,203,780

56,605,376

Unallocated:
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Cash and cash equivalents
Trade and other receivables
Prepaid operating expenses
Other current assets
Others187,059
762,869
30,363,868
1,543,842
50,065,156
1,161,189
277,469
1,137,569
881,031

209,631317,541
28,290,436
2,047,963
20,442,990
908,979
462,994
75,749770,210

152,173
857,940
26,231,087
1,530,606
14,705,722
816,714533,337
1,577,075
419,471

Total assets

175,543,299

144,730,273

103,429,501

A-68

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

30.

Segment information (cont’d)Reconciliations (cont’d)
The unallocated intangible assets mainly consist of goodwill, which is not allocated to any
reportable segment, in view that the carrying value of goodwill arose from the acquisition of
17LIVE Japan, which is principally engaged in activities across the Group’s segments.
The unallocated trade and other receivables mainly consist of receivable from the issuanceof preference shares which is not allocated to any segments.
Segment liabilities are reconciled to total liabilities as follows:
2020
US$

2021
US$

2022
US$

Segment liabilities for reportable segments
Other segment liabilities

100,866,944
843,264

99,450,890
1,366,651

57,142,617
1,637,230

Total segment liabilities

101,710,208

100,817,541

58,779,847

Unallocated:
Trade and other payables
16,567,058
Income tax payable
2,186,500
Financial liabilities at fair value through profit
or loss
279,485,191
Loans and borrowings
6,858,336
Provisions
187,765
Other current liabilities
776
Deferred tax liabilities
1,562,503
Lease liabilities
821,742

7,217,841
7,593,181

9,166,104
5,623,923

155,243,005
1,164,988
323,118
181,443
962,096
298,500

211,102,455
í
341,485
163,541
592,555
858,380

Total liabilities

273,801,713

286,628,290

409,380,079

Geographical information
2020

Revenue
Gross profit
Non-current assets

Japan
US$

TaiwanUS$

OthersUS$285,841,235
137,686,142
1,004,308

71,023,148
17,513,527
8,590,900

Japan
US$

TaiwanUS$364,877,950
152,892,310
671,757

86,735,137
21,186,888
7,360,776

Total
US$

54,496,047 411,360,430
20,159,451 175,359,120
31,309,771
40,904,979

2021

Revenue
Gross profit
Non-current assets

A-69

Others
US$

Total
US$

46,169,205 497,782,292
13,667,756 187,746,954
30,524,142
38,556,675

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

30.

Segment information (cont’d)Geographical information (cont’d)2022

Revenue
Gross profit
Non-current assets

Japan
US$

TaiwanUS$251,926,993
104,888,589
1,258,984

86,830,039
17,264,361
590,210

Others
US$

Total
US$

24,960,818 363,717,850
3,996,145 126,149,095
27,337,988
29,187,182

The revenue of geographical information does not include amounts from discontinued
operations.
Non-current assets information presented above consist of property, plant and equipment,right-of-use assets and intangible assets as presented in the consolidated balance sheets.
31.

Fair value of assets and liabilities(a)

Fair value hierarchy
The Group categorises fair value measurements using a fair value hierarchy that isdependent on the valuation inputs used as follows:--

Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date. A market isregarded as active where a market in which transactions for the asset or liability
take place with sufficient frequency and volume to provide pricing information on
an ongoing basis.
Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. Regarding the convertible
debentures payable and preference shares liabilities issued by the Group
without active market is included in Level 3.

Fair value measurements that use inputs of different hierarchy levels are categorised
in its entirety in the same level of the fair value hierarchy as the lowest level input thatis significant to the entire measurement.

A-70

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

31.

Fair value of assets and liabilities (cont’d)(b)Assets and liabilities measured at fair value
The following table shows an analysis of each class of assets and liabilities measured
at fair value at the reporting date:
2020
Level 1
US$

Level 2
US$

Level 3
US$

Total
US$

AssetsRecurring fair value
measurements
Financial assets measured at fairvalue through profit or loss
Money market fund investments

144,745

íí

144,745

Total

144,745

íí

144,745

Liabilities
Recurring fair value
measurements
Financial assets measured at fairvalue through profit or loss
Warrants
Preference sharesííí
821,000
821,000
í 278,664,192 278,664,192

Total

í

í 279,485,192 279,485,192
2021

Level 1
US$

Level 2
US$

Level 3
US$

Total
US$

AssetsRecurring fair value
measurements
Financial assets measured at fairvalue through profit or loss
Money market fund investments

108,813íí

108,813

Total

108,813íí

108,813

Liabilities
Recurring fair value
measurements
Financial assets measured at fairvalue through profit or loss
Warrants
Preference sharesííí
295,000
295,000
í 154,948,006 154,948,006

Total

í

í 155,243,006 155,243,006

A-71

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

31.

Fair value of assets and liabilities (cont’d)(b)Assets and liabilities measured at fair value (cont’d)2022
Level 1
US$

Level 2
US$

Level 3
US$

Total
US$

Liabilities
Recurring fair value
measurements
Financial assets measured at fairvalue through profit or loss
Warrants
Preference sharesííí
587,000
587,000
í 210,515,456 210,515,456

Total

í

í 211,102,456 211,102,456

There was no transfer between Level 1 and Level 2 for the years ended 31 December
2020, 2021 and 2022.
(c)

Level 3 fair value measurements(i)

Information about significant unobservable inputs used in Level 3 fair value
measurements
The fair values of warrants are determined using the Black-Scholes pricing
model where the significant unobservable input is expected volatility. An
increase in the expected volatility used in isolation would result in an increase in
the fair value.
The fair value of convertible and redeemable preference shares was determinedusing the market approach, making reference to the transaction price of the mostrecent round of financing and taking into consideration factors such as market
volatility, successful exit and liquidation transaction.
The following table shows the information about fair value measurements using
unobservable inputs (Level 3):
2020
Range
Preference shares:- Risk-free rate
- Volatility
Warrants:- Risk-free rate
- Volatility

0.1%
55.0%

2021
Range
0.7%
69.0%

2022
Range
4.3%
76.0%

0.1% to 0.3% 0.59% to 1.08%
4.2% to 4.8%
49.4% to 54.9% 56.1% to 69.6% 68.0% to 89.4%

The following table shows the impact on the Level 3 fair value measurement ofliabilities that are sensitive to changes in unobservable inputs that reflectreasonably possible alternative assumptions. The positive and negative effects
are approximately the same.

A-72

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

31.

Fair value of assets and liabilities (cont’d)(c)Level 3 fair value measurements (cont’d)(i)Information about significant unobservable inputs used in Level 3 fair value
measurements (cont’d)

Input
Preference shares
Preference shares
Warrant
Warrant

Risk-free rate
Volatility
Risk-free rate
Volatility

Input
Preference shares
Preference shares
Warrant
Warrant

Risk-free rate
Volatility
Risk-free rate
Volatility

Input
Preference shares
Preference shares
Warrant
Warrant

Risk-free rate
Volatility
Risk-free rate
Volatility

A-73

Change
±1%
±1%
±1%
±1%

Change
±1%
±1%
±1%
±1%

Change
±1%
±1%
±1%
±1%

2020
Recognised in profit or loss
Favourable Unfavourable
changechangeUS$US$336,215
178,878
21,00013,000(333,374)(187,346)(21,000)(13,000)

2021
Recognised in profit or loss
Favourable Unfavourable
changechangeUS$US$
101,178
100,153
7,000
7,000

(106,866)(106,866)(7,000)(7,000)2022
Recognised in profit or loss
Favourable Unfavourable
changechangeUS$US$
163,545
116,097
8,000
7,000

(159,114)(120,601)(8,000)(8,000)APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

31.

Fair value of assets and liabilities (cont’d)(c)Level 3 fair value measurements (cont’d)(ii)

Movements in Level 3 liabilities measured at fair value
The following table presents the reconciliation for all liabilities measured at fairvalue based on significant unobservable inputs (Level 3):
Financial liabilities at fair value throughprofit or loss
2020
2021
2022
US$
US$
US$

(ii)

At 1 January
Issued during the period
Repurchased during the period
Loss on repurchase of preference
shares
Revaluation loss/(gain) on
financial liabilities
Change in credit risks throughother comprehensive income

178,299,311
41,905,000
íAt 31 December

279,485,192 155,243,006
íí
(14,563,055)
íí

2,708,549

í59,105,881(112,407,180)

55,860,150

175,000

19,500(700)

279,485,192

155,243,006

211,102,456

Valuation policies and procedures
For all significant financial reporting valuations using valuation models andsignificant unobservable inputs, it is the Group’s policy to engage externalvaluation experts who possess the relevant credentials and knowledge on thesubject of valuation, valuation methodologies and IFRS 13 fair value
measurement guidance to perform the valuation.
For valuations performed by external valuation experts, the appropriateness ofthe valuation methodologies and assumptions adopted are reviewed along withthe appropriateness and reliability of the inputs (including those developed
internally by the Group) used in the valuations.
In selecting the appropriate valuation models and inputs to be adopted for eachvaluation that uses significant non-observable inputs, external valuation experts
are requested to calibrate the valuation models and inputs to actual market
transactions (which may include transactions entered into by the Group with third
parties as appropriate) that are relevant to the valuation if such information isreasonably available.
Significant changes in fair value measurements from period to period are
evaluated for reasonableness. Key drivers of the changes are identified andassessed for reasonableness against relevant information from independentsources, or internal sources if necessary and appropriate.

A-74

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

31.

Fair value of assets and liabilities (cont’d)(d)Assets and liabilities not measured at fair value
Trade and other receivables, cash and cash equivalents, other current assets, tradeand other payables
The carrying amounts of these balances approximate their fair values due to the shortterm nature of these balances.

32.

Financial risk management objectives and policies
The Group is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include credit risk, liquidity risk and foreign currency risk.
The board of directors reviews and agrees on policies and procedures for the managementof these risks, which are executed by the management team. It is, and has been, throughout
the current and previous financial year, the Group’s policy that no trading in derivatives for
speculative purposes shall be undertaken.
The following sections provide details regarding the Group’s exposure to the abovementioned financial risks and the objectives, policies and processes for the
management of these risks.
There has been no change to the Group’s exposure to these financial risks or the manner inwhich it manages and measures the risks.
(a)Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual
obligations resulting in a loss to the Group. The Group’s exposure to credit risk arises
primarily from trade and other receivables. For other financial assets, the Group
minimises credit risk by dealing exclusively with high credit rating counterparties.
The Group considers the probability of default upon initial recognition of asset andwhether there has been a significant increase in credit risk on an ongoing basis
throughout each reporting period.
The Group has determined the default event on a financial asset to be when internal
and/or external information indicates that the financial asset is unlikely to be received,
which could include default of contractual payments due for more than 180 days or
there is significant difficulty of the counterparty.

A-75

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

32.

Financial risk management objectives and policies (cont’d)(a)Credit risk (cont’d)
To assess whether there is a significant increase in credit risk, the Group compares
the risk of a default occurring on the asset as at reporting date with the risk of default
as at the date of initial recognition. The Group considers available reasonable andsupportive forward-looking information which includes the following indicators:--

External credit rating
Actual or expected significant adverse changes in business, financial or
economic conditions that are expected to cause a significant change to thedebtor’s ability to meet its obligations
Actual or expected significant changes in the operating results of the debtor
Significant increases in credit risk on other financial instruments of the samedebtorSignificant changes in the expected performance and behaviour of the debtor,
including changes in the payment status of debtor and changes in the operating
results of the debtor.

The Group determined that its financial assets are credit-impaired when:-

There is significant difficulty of the issuer or the debtor
A breach of contract, such as a default or past due event
It is becoming probable that the debtor will enter bankruptcy or other financial
reorganisation
There is a disappearance of an active market for that financial asset because offinancial difficulty

Financial assets are written off when there is no reasonable expectation of recovery,such as a debtor failing to engage in a repayment plan with the Group. Where loans
and receivables have been written off, the Group continues to engage enforcement
activity to attempt to recover the receivable due. Where recoveries are made, these
are recognised in profit or loss.
Trade receivables
The Group provides for lifetime expected credit losses for all trade receivables using aprovision matrix, estimated based on historical credit loss experience based on thepast due status of the debtors, adjusted as appropriate to reflect current conditions andestimates of future economic conditions. Accordingly, the credit risk profile of tradereceivables is presented based on their past due status in terms of the provision matrix.
Information regarding loss allowance movement and credit risk exposure on tradereceivables is disclosed in Note 18.
Excessive risk concentration
There is no significant concentration of credit risk relating to the Group’s tradereceivables.

A-76

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

32.

Financial risk management objectives and policies (cont’d)(a)Credit risk (cont’d)Exposure to credit risk
At the end of the reporting period, the Group’s maximum exposure to credit risk isrepresented by the carrying amount of financial assets recognised in the consolidatedbalance sheets.
Other receivables
The Group assessed the latest performance and financial position of thecounterparties, adjusted for the future outlook of the industry in which thecounterparties operate in, and concluded that there has been no significant increasein the credit risk since the initial recognition of the financial assets. Accordingly, theGroup measured the impairment loss allowance using 12-month ECL and determinedthat the ECL is insignificant.

(b)Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial
obligations due to shortage of funds. The Group’s exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The
Group manages and maintains adequate cash and cash equivalents to finance theGroup’s operations.
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group’s financial liabilities atthe end of the reporting period based on contractual undiscounted repayment
obligations.
Less than
1 yearUS$

1 to 3
years
US$

2020
3 to 5years
US$More than
5 years
US$

Total
US$

Financial liabilities
Trade and otherpayablesLoans and borrowings
Lease liabilities
Preference shares
Warrants

74,959,936
í
6,277,861
1,180,415
2,444,182
4,178,150
í 254,109,734
821,000ííí
3,528,785ííí 74,959,936
í
7,458,276
6,772 10,157,889
í 254,109,734
í821,000

Total net undiscounted
financial liabilities

84,502,979 259,468,299

3,528,785

6,772 347,506,835

A-77

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

32.

Financial risk management objectives and policies (cont’d)(b)Liquidity risk (cont’d)Analysis of financial instruments by remaining contractual maturities (cont’d)Less than
1 yearUS$

2021
3 to 5years
US$More than
5 years
US$

Total
US$

Financial liabilities
Trade and otherpayablesLoans and borrowings
Lease liabilities
Preference shares
Warrants

72,586,860
í
1,164,988
í
2,827,438
4,686,934
í 243,566,268
295,000ííí
1,946,623
ííí 72,586,860
í
1,164,988
í
9,460,995
í 243,566,268
í295,000

Total net undiscounted
financial liabilities

76,874,286 248,253,202

1,946,623

í 327,074,111

2022
3 to 5years
US$Less than
1 yearUS$

1 to 3years
US$50,800,817
971,692
243,566,268
587,000í
1,024,362
í
í

í
7,072
í
í

í 50,800,817
í
2,003,126
í 243,566,268
í587,000

Total net undiscounted
financial liabilities
295,925,777

1,024,362

7,072

í 296,957,211

Financial liabilities
Trade and otherpayablesLease liabilities
Preference shares
Warrants(c)

1 to 3years
US$More than
5 years
US$

Total
US$

Foreign exchange risk
The Group’s foreign exchange risk results mainly from cash flows from transactions
denominated in foreign currencies. At present, the Group does not have any formal
policy for hedging against currency risk.
The Group has transactional currency exposures arising from sales or purchases thatare denominated in a currency other than the functional currency of the Group,
primarily Hong Kong Dollar (“HKD”).

A-78

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

32.

Financial risk management objectives and policies (cont’d)(c)Foreign exchange risk (cont’d)Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s (loss)/profit before tax
to a reasonably possible change in the HKD exchange rates against the respectivefunctional currencies of the Group entities, with all other variables held constant.
Change in
USD rate

USD/HKD

33.

+1%
-1%

Effect on (loss)/profit before tax
2020
2021
2022
US$
US$
US$
(150,689)
153,734(189,260)
193,083(76,773)
78,324

Financial instruments by category
At the reporting date, the aggregate carrying amounts of financial assets at amortised costand financial liabilities at amortised cost were as follows:

Financial assets measured at amortised
cost
Trade and other receivables
Cash and cash equivalents
Guarantee deposits

Financial liabilities measured at amortised
cost
Trade and other payables
Loans and borrowings

A-79

2020
US$

2021
US$

2022
US$

32,595,861
92,491,374
3,403,741

34,218,084
59,090,846
3,645,149

24,027,252
39,259,309
3,696,046

128,490,976

96,954,079

66,982,607

74,959,936
6,858,336

72,586,860
1,164,988

50,800,817
í81,818,272

73,751,848

50,800,817

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

34.

Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability tocontinue as a going concern in order to provide returns for shareholders and to maintain an
optimal capital structure to reduce the cost of capital. In order to improve the Group’s capital
structure, the Group may issue new shares or sell assets to reduce debt rate. The Group
monitors capital on the basis of the debt ratio. This ratio is calculated as total liabilities divided
by total assets.
As of 31 December 2020, 2021 and 2022, the Group’s debt ratios are as follows:
2020
US$Total assets
Total liabilities

2022
US$

175,543,299 144,730,273 103,429,501
409,380,079 273,801,713 286,628,290

Debt ratio

35.

2021
US$

2.33

1.89

2.77

Investments in subsidiaries
The Group has the following investments in subsidiaries during the financial years ended 31
December 2020, 2021 and 2022:
Ownership (%)
Name of subsidiary

Country ofincorporation

Principal activities

2020

2021

2022

Note

British Virgin Live streaming
Islands
Paktor Pte. Ltd.
Singapore
On-line dating
Jendes Limited
Seychelles
Apparel17LIVE Japan Inc.
Japan
Live streaming
17 Media SG Pte. Ltd.
Singapore
Live streaming
M17 Services (H.K.) Ltd.
Hong Kong Entertainment agent
United Arab Live streaming
Ichi Nana Marketing
EmiratesManagement
Next Entertainment Global Cayman Islands Live streaming
Holding
Unicorn Entertainment Ltd.
TaiwanEntertainment agent(Taiwan)*Together Production LLC*
TaiwanMovie production andcopyright holder
Together Interactive
TaiwanEntertainment agent
Entertainment Limited*
Together Interactive Media
TaiwanEntertainment agent
Limited*Together Universal
TaiwanEntertainment agent
Entertainment Limited*
Together International
TaiwanEntertainment agent
Entertainment Limited*
LIVIT Ltd.*
TaiwanEntertainment agent
LIVIT Business Ltd.*
TaiwanEntertainment agent
LIVIT Universe Ltd.*
TaiwanEntertainment agent

100

100

100

(a)

–
–
100
100
100
Note

–
–
100
100
100
–

–
–
100
100
–
–

(b)
(c)
(d)
(e)
(f)

100

100

100

(g)

Note

–

–

(h)

Note

Note

Note

–

Note

Note

Note

–

Note

Note

Note

–

Note

Note

Note

–

Note

Note

Note

–

Note
Note
Note

Note
Note
Note

–
Note
–

(i)

Ichi Nana Inc.

A-80

(i)

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

35.

Investments in subsidiaries (cont’d)Subsidiaries included in the consolidated financial statements (cont’d):Ownership (%)
Name of subsidiary

Country ofincorporation

HandsUp Inc.
Wave Inc.
Next Entertainment Inc.

TaiwanTaiwanTaiwan17LIVE Services Inc.
17LIVE (SEA) Pte. Ltd.
17LIVE Ltd.
Next Entertainment(Hong Kong) Limited
17LIVE (USA) Corp.

TaiwanSingapore
Hong Kong
Hong Kong

Principal activities
Online retailingLive streaming
Live streaming andgamingTechnical services
Live streaming
Live streaming
Live streaming

United States of Live streaming
America
India
Live streaming

Liontrek Entertainment
India Pvt. Ltd.
Gaigai Pte Ltd.
Singapore
Off-line dating
Paktor Ltd. Taiwan Branch
TaiwanOff-line dating
Paktor MY Sdn Bhd
Malaysia
Off-line dating
Paktor Hong Kong Ltd.
Hong Kong Off-line dating
Picnic Pte Ltd.
Singapore
Off-line dating
17LIVE (Taiwan) Limited
TaiwanLive streaming
Machipopo Co., Ltd.
JapanEntertainment agent
M17 (USA) LLC
United States of Live streaming
America
MyMai Inc.*
TaiwanOnline retailing
M17 Service Vietnam
Vietnam
Technical service
Company Limited
M17 Service Holding Co.,
ThailandInvestment holdingLtd.
M17 Service (Thailand)
ThailandTechnical service
Co., Ltd.
Next Entertainment
British Virgin Live streaming
LimitedIslands
Entertainment Vision Hong
Hong Kong Live streaming
Kong Limited
Empower Next Limited*
TaiwanE-sport team
Next Entertainment
Live streaming
People’s
Science & Technology Republic of China(Beijing) Co., Ltd
Next Entertainment Japan
Japan
Live streaming
Beijing Future Quyu
People’s
Live streaming
Technology Co. Ltd.*
Republic of China
Shenzhen Juli Future
People’s
Live streaming
Network Technology
Republic of China
Co., Ltd*
Next Entertainment Inc.
TaiwanEntertainment agent

A-81

2020

2021

2022

Note

100
Note
–

100
100
100

100
100
100

–
(j)
(k)

–
–
100
100

100
100
100
100

100
100
100
100

(l)
(m)
(n)
–

–

100

100

(o)

100

100

100

(g)

–
–
–
–
–
–
100
100

–
–
–
–
–
100
100
100

–
–
–
–
–
100
100
100

(b)
(b)
(b)
(b)
(b)
(p)
–
–

Note
–

Note
–

Note
–

–
(q)

100

–

–

(r)

100

–

–

(r)

100

100

100

(g)

100

–

–

(g)(s)

Note
100

Note
100

Note
100

(g)
(g)

100
Note

100
Note

–
Note

(g)(t)
(g)

Note

Note

Note

(g)

–

100

100

(p)

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

35.

Investments in subsidiaries (cont’d)
Note:

As of 31 December 2022, these entities were held by other individual owners. The Grouphas yet to complete the legal process to acquire the ownership interests of these entities
due to local regulation. The Group and the individual owners have entered into
contractual agreements giving the Group the power to direct the relevant activities andthe ability to use its power to affect variable returns. The operating activities and thefinance function are also controlled by the Group. Management has assessed that theGroup has control over these entities and the Group has included the results of these
entities in the consolidated financial statements. The total assets from these entities
amounted to US$2,758,945, US$1,444,859 and US$355,752 as of 31 December 2020,2021 and 2022 respectively, representing 1.57%, 1.00% and 0.34% of total consolidated
assets. The total comprehensive income from these entities amounted to
US$(3,435,993), US$2,189,590 and US$959,120 for the financial years ended 31
December 2020, 2021 and 2022 respectively, representing 6.57%, 2.05% and (1.74)%
of total consolidated comprehensive income.

(a)

The subsidiary changed its company name from “Machipopo, Inc.” to “Ichi Nana Inc.” in
October 2020.
The Company disposed of Paktor Pte. Ltd. in March 2020, refer to Note 11 for details.
The Company disposed of Jendes Limited in May 2020, refer to Note 11 for details.
The subsidiary changed its company name from “17Media Japan Inc.” to “17LIVE Japan
Inc.” in November 2020.
The subsidiary was de-registered in September 2022.
The subsidiary of the Company was established in October 2019 and dissolved in
September 2021.
The Company acquired 100% shares of Next Entertainment Global Holding in January
2020, refer to Note 20 for details.
The Company disposed of Unicorn Entertainment in March 2021.
The subsidiaries of the Company were established in July 2020 and liquidated in
December 2022.
The subsidiary changed its company name from “Beyond Entertainment Limited” to“Wave Inc.” in June 2019. After a capital injection by Ichi Nana Inc. in July 2021, Wave
Inc became a wholly owned subsidiary of Ichi Nana Inc. and Wave Inc. was subsequently
transferred to 17LIVE Japan Inc. in December 2021.
Next Entertainment Inc. (Taiwan) was incorporated by Next Entertainment Limited in
October 2021.
17LIVE Services Inc. (Taiwan) was incorporated in July 2021.
17LIVE (SEA) Pte. Ltd. was incorporated in Singapore by 17LIVE Japan Inc. in
December 2021.
The subsidiary changed its company name from “17Media HK Ltd.” to “17LIVE (HK) Ltd.”In July 2020, and then to “17LIVE Ltd.” in December 2020.
The subsidiary was incorporated in California, USA in January 2021.
The subsidiary was incorporated in Taiwan in October 2021.
The subsidiary of the Company was dissolved in June 2020.
The subsidiary was dissolved in April 2021.
The subsidiary was dissolved in April 2021.
The subsidiary was de-registered in March 2022.

(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)

(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(s)
(t)

A-82

APPENDIX A: INDEPENDENT AUDITOR’S REPORT AND AUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF THE TARGET GROUP FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2020, 2021 AND 2022
17LIVE Inc. and its Subsidiaries
Notes to financial statements
For the financial years ended 31 December 2020, 2021 and 2022

36.

Events occurring after the reporting period
On 3 April 2023, the redemption date of all of the Group’s preference shares, which amounted
to US$210,515,456 as of 31 December 2022, has been extended to 31 December 2025.
On 2 October 2023, Vertex Technology Acquisition Corporation Ltd (“VTAC”), a special
purpose acquisition company incorporated as a Cayman Islands exempted company withlimited liability and listed on the Mainboard of the Singapore Exchange Securities Trading
Limited, entered into a conditional sale and purchase agreement (the “SPA”) with, among
others, the Company (as the target) and 17LIVE Holding Limited (“17LIVE Holdco”) (as theseller). Pursuant to the SPA, VTAC will acquire the entire issued and paid-up share capitalof the Company from 17LIVE Holdco. The SPA contains customary representations,warranties and covenants by the parties thereto and the Completion (as defined in the SPA)
is subject to certain conditions as further described in the SPA.
In connection with but not conditional on the completion of the Proposed Acquisition of theGroup by VTAC, on 20 October 2023, the Company’s shareholders approved, by way of an
Extraordinary General Meeting, the conversion of the warrants and preference shares of theGroup, which aggregated to US$211,102,456, into equity. The conversion is expected to be
take place before the completion of the Proposed Acquisition.

37.

Authorisation of financial statements for issue
The consolidated financial statements for the financial years ended 31 December 2020, 2021
and 2022 were authorised for issue in accordance with a resolution of the directors on 9
November 2023.

A-83

This page has been intentionally left blank.

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

17LIVE Inc. and its Subsidiaries
Consolidated Financial Statements
For the six-month period ended 30 June 2023

B-1

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Directors’ statement
For the six-month period ended 30 June 2023

In the opinion of the directors,(i)the accompanying consolidated financial statements of 17LIVE Inc. (the “Company”) and its
subsidiaries (collectively, the “Group”) are properly drawn up so as to give a true and fairview of the consolidation financial position of the Group as at 30 June 2023, and of theconsolidated financial performance, consolidated changes in equity and consolidated cash
flows of the Group for the six-month period ended 30 June 2023; and(ii)

at the date of this statement, there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they fall due.

On behalf of the Board of Directors:

Phua Jiexian Joseph
Director

Chua Joo HockDirector

9 November 2023

B-2

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Independent auditor’s report in relation to the unaudited consolidated financial statements of
17LIVE Inc. and its subsidiaries
For the six-month period ended 30 June 2023

The Board of Directors
17LIVE Inc.
4th Floor Harbour Place 103
South Church Street P.O. Box 10240
Grand Cayman, KY1-1002
Cayman Islands
Dear Sirs,
Introduction
We have reviewed the accompanying interim unaudited consolidated financial statements of
17LIVE Inc. (the “Company”) and its subsidiaries (collectively, the “Group”) which comprise theconsolidated balance sheet of the Group as at 30 June 2023, the consolidated statement ofcomprehensive income, consolidated statement of changes in equity and consolidated statementof cash flows for the six-month period then ended, and a summary of significant accounting policies,
as set out on pages B-5 to B-69. Management is responsible for the preparation and fairpresentation of this interim unaudited consolidated financial statements in accordance with theInternational Accounting Standards 34, Interim Financial Reporting (“IAS 34”). Our responsibility is
to express a conclusion on the interim unaudited consolidated financial statements based on ourreview.
Scope of Review
We conducted our review in accordance with Singapore Standard on Review Engagements 2410,“Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A
review of interim financial information consists of making inquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. A review
is substantially less in scope than an audit conducted in accordance with Singapore Standards on
Auditing and consequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that theaccompanying interim financial statements do not present fairly, in all material respects, the financial
position of the Group as at 30 June 2023 and its financial performance, changes in equity and cash
flows for the six-month period ended 30 June 2023 in accordance with International Financial
Reporting Standards.

B-3

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Independent auditor’s report in relation to the unaudited consolidated financial statements of
17LIVE Inc. and its subsidiaries
For the six-month period ended 30 June 2023

Restriction on distribution and use
This report is made solely to you as a body and for the inclusion in the Circular of Vertex Technology
Acquisition Corporation Ltd (“VTAC”) to be issued in connection with VTAC’s proposed acquisition of
the entire issued share capital of the Company, being a reverse takeover.

Ernst & Young LLP
Public Accountants andChartered Accountants
Singapore
9 November 2023
Partner-in-charge: Sharon Peh

B-4

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Consolidated statements of comprehensive income
For the six-month period ended 30 June 2023
(Expressed in United States Dollars)Note 30 June 2023 30 June 2022
(Unaudited)(Unaudited)
US$
US$
Operating revenue
Cost of revenue

4
5

150,984,528
200,421,415(87,925,616) (134,939,455)

Gross profit

63,058,912

65,481,960

Operating expenses
Selling expenses
General and administrative expenses
Research and development expenses(24,315,104)(12,219,602)(13,517,949)(37,147,966)(14,060,317)(13,138,266)(50,052,655)(64,346,549)

13,006,257

1,135,411

8
8(127,649,235)(638,459)(38,013,667)
3,156,561

9(128,287,694)(53,763)(34,857,106)(109,667)(128,341,457)(34,966,773)(115,335,200)(2,909,563)(33,831,362)(8,142,785)(118,244,763)(41,974,147)(1,210,349)(2,605,973)(20,700)

1,900(1,231,049)

ĩ2,604,073)(119,475,812)(44,578,220)(3.12)(1.11)

Total operating expenses

6

Operating income
Non-operating income and expenses
Other gains and losses- Revaluation loss on financial liabilities- Others
Finance costs
Total non-operating expenses
Loss before income tax
Income tax expense

10

Loss for the period, attributable to owners of theCompany
Other comprehensive income:Items that may be reclassified to profit or loss
Foreign currency translation
Items that will not be reclassified to profit or loss
Change in credit risk of financial liabilities at fair value throughprofit or loss
Other comprehensive income for the period, net of tax
Total comprehensive income for the period, attributable toowners of the Company
Earnings per share
Basic and diluted

11

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

B-5

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Consolidated balance sheets
As at 30 June 2023
(Expressed in United States Dollars)
30 June2023(Unaudited)US$

31 December
2022(Audited)
US$

1,186,719
3,405,201
25,188,892
2,302,375
3,490,677

795,789
1,848,265
26,543,128
1,537,813
3,696,046

35,573,864

34,421,041

2,581,499
751,940
20,551,791
39,865,932

3,369,559
2,325,918
24,053,674
39,259,309

Total current assets

63,751,162

69,008,460

Total assets

99,325,026

103,429,501

47,259,978
6,860,310
1,023,000
3,415,305
1,614,677
855,409407,506

59,043,917
7,273,934
211,102,456
5,255,771
920,219
893,360
106,744

Total current liabilities

61,436,185

284,596,401

Net current assets/(liabilities)

2,314,977(215,587,941)

337,749,391
329,955
1,772,991
359,504–
855,590
1,012,263
164,036

Total non-current liabilities

340,211,841

2,031,889

Total liabilities

401,648,026

286,628,290

Note
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Guarantee deposits

12
13
14
15

Total non-current assets
Current assets
Prepaid operating expenses
Other current assets
Trade and other receivables
Cash and cash equivalents

16
17
18

LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Financial liabilities at fair value through profit or loss
Income tax payable
Lease liabilities
Provisions
Other current liabilities

Non-current liabilities
Financial liabilities at fair value through profit or loss
Deferred tax liabilities
Lease liabilities
Provisions

19
4
20
13

20
15
13

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

B-6

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Consolidated balance sheets
As at 30 June 2023
(Expressed in United States Dollars)

Note
EquityShare capital
Share premium
Other reserves
Accumulated deficit

22
23
24

Total equity

30 June2023(Unaudited)US$

31 December
2022(Audited)
US$

3,792
3,792
25,409,440
25,409,440(2,889,929)(2,010,481)(324,846,303) (206,601,540)(302,323,000) (183,198,789)

Total liabilities and equity

99,325,026

103,429,501

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

B-7

B-8
25,409,440––

Accumulated
deficitUS$

Total equity
US$

–

–
–

(1,231,049)(20,700)(1,210,349)–

351,601(2,889,929) (324,846,303) (302,323,000)

351,601(1,231,049) (118,244,763) (119,475,812)(1,231,049)(20,700)(1,210,349)(2,010,481) (206,601,540) (183,198,789)– (118,244,763) (118,244,763)

Otherreserves
US$The accompanying accounting policies and explanatory notes form an integral part of the consolidated financial statements.

3,792

–

Issuance of restricted share units

At 30 June 2023–

Total comprehensive income for the period

–
–

–
–
–

25,409,440–

Sharepremium
US$

3,792
–

Share
capital
US$

–

21

Note

Other comprehensive income for the period, net of tax

At 1 January 2023
Loss for the period
Other comprehensive income:Change in credit risk of financial liabilities at fair value throughprofit or loss
Foreign currency translation

Unaudited
30 June 2023

(Expressed in United States Dollars)

Consolidated statements of changes in equity
For the six-month period ended 30 June 2023

17LIVE Inc. and its subsidiaries

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

B-9–

Issuance of restricted stock units

25,409,440––

Accumulated
deficit
US$
Total
US$

(173,179,174)

470,486(44,578,220)(41,974,147)–(2,604,073)(2,605,973)
1,900
–

–
–

(1,033,550) (197,558,856)

470,486(2,604,073)(2,604,073)(2,605,973)
1,900

1,100,037 (155,584,709) (129,071,440)(41,974,147) (41,974,147)–

Other
reserves
US$The accompanying accounting policies and explanatory notes form an integral part of the consolidated financial statements.

3,792

–

Total comprehensive income for the period

At 30 June 2022–

Other comprehensive income for the period, net of tax

–

–
–

–
–

Share
premiumUS$25,409,440–

Sharecapital
US$

3,792
–

21

Note

At 1 January 2022
Loss for the period
Other comprehensive income:Change in credit risk of financial liabilities at fair value throughprofit or loss
Foreign currency translation

Unaudited
30 June 2022

(Expressed in United States Dollars)

Consolidated statements of changes in equity
For the six-month period ended 30 June 2023

17LIVE Inc. and its subsidiaries

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Consolidated statements of cash flows
For the six-month period ended 30 June 2023
(Expressed in United States Dollars)
30 June2023(Unaudited)US$

30 June2022(Unaudited)
US$

Cash flows from operating activities
Loss before income tax(115,335,200)(33,831,362)

Adjustments for:
Depreciation expense
Amortisation expense
Loss on disposal of property, plant and equipment
Share-based payments
Revaluation loss on financial liabilities
Finance costs
Gain on termination of leases
Professional fees in relation to the Proposed Acquisition

1,053,772
1,333,837
339,744351,601
127,649,235
53,763(3,942)
1,534,899

1,647,526
1,096,280
128,461
470,486
38,013,667
109,667(22,592)–

Operating cash flows before changes in working capital

16,977,709

7,612,133

Changes in working capital
Trade and other receivables
Prepaid operating expenses
Other current assets
Trade and other payables
Other current liabilities
Contract liabilities
Provisions

3,501,883
788,060
1,573,978(13,318,838)
300,762(413,624)(37,951)

7,513,332
2,168,982(83,259)(20,038,724)
270,024(2,136,080)
91,587

Cash flows from/(used in) operations
Interest paid
Income tax paid

9,371,979–(5,383,534)(4,602,005)(7,805)(11,441,622)

Net cash flows from/(used in) operating activities

3,988,445(16,051,432)

Investing activities
Decrease in financial assets at fair value through profit or loss
Purchase of property, plant and equipment
Purchase of intangible assets
Decrease/(increase) in guarantee deposits–(964,143)–
205,369

108,813(311,275)(187,691)(169,931)

Net cash flows used in investing activities(758,774)(560,084)

Financing activities
Repayments of principal portion of lease liabilities
Repayment of loans and borrowings
Interest paid

(739,698)–(51,684)(1,339,365)(1,166,666)(100,184)

Net cash flows used in financing activities(791,382)(2,606,215)

Net increase/(decrease) in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at beginning of financial period

2,438,289(1,831,666)
39,259,309(19,217,731)(3,700,288)
59,090,846

Cash and cash equivalents at end of financial period

39,865,932

36,172,827

The accompanying accounting policies and explanatory notes form an integral part of theconsolidated financial statements.

B-10

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

1.

Corporate information
17LIVE Inc. (the “Company”) was incorporated as a Cayman Islands exempted company
with limited liability on 28 February 2017 under the Companies Act of the Cayman Islands,
under the name of M17 Entertainment Limited. On 23 September 2020, the Company
changed its name to 17LIVE Inc..
The registered office of the Company is located at 4th Floor, Harbour Place, 103 South
Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. The principal
place of business of the Company is located at 2-chǀme-12-28 Kitaaoyama, Minato City,Tǀkyǀ-to 107-006.
The Company and its subsidiaries (collectively, the “Group”) are principally engaged inoperating live streaming platform. Information on the subsidiaries is disclosed in Note 32.

2.

Summary of significant accounting policies

2.1

Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with
International Financial Reporting Standards (“IFRSs”) as issued by the International
Accounting Standards Board (“IASB”).
The consolidated financial statements have been prepared on the historical cost basis except
as disclosed in the accounting policies below.
The consolidated financial statements are presented in United States Dollars (“USD” or“US$”) except when otherwise indicated.
Going concern
As of 30 June 2023, the Group’s total liabilities exceeded its total assets by US$302,323,000.
Notwithstanding this, the consolidated financial statements of the Group have been preparedon a going concern basis due to the following:--

As of 30 June 2023, the Group’s current assets exceeded its current liabilities by
US$2,314,977;
The Group is expected to continue to generate positive operating cash flows andpositive net cash flows to pay its liabilities as and when they fall due for the next 12months from the issuance of these interim consolidated financial statements; andIn connection with but not conditional on the completion of the Proposed Acquisitionof the Group by Vertex Technology Acquisition Corporation Ltd, on 20 October 2023,
the Company’s shareholders approved, by way of an Extraordinary General Meeting,the conversion of the warrants and preference shares of the Group, which aggregatedto US$211,102,456, into equity. The conversion is expected to be take place before
the completion of the Proposed Acquisition.

B-11

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)2.2

Changes in accounting policies
The accounting policies have been consistently applied by the Group for the six-month period
ended 30 June 2023, except that for the six-month period ended 30 June 2023, the Group
has adopted all the new and revised standards that are effective for annual financial periods
beginning on or after 1 January 2023. The adoption of these standards did not have any
material effect on the financial performance or position of the Group.

2.3

Standards issued but not yet effective
The Group has not adopted the following standards applicable to the Group that have been
issued but are not yet effective:
Effective for annual
periods beginning on
or after

Description
Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current
Amendments to IFRS 16 Leases: Lease Liability in a Sale andLeasebackAmendments to IAS 1 Presentation of Financial Statements:
Non-current Liabilities with Covenants
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangement
Amendments to IAS 21: Lack of Exchangeability

1 January 2024
1 January 2024
1 January 2024
1 January 2024
1 January 2025

The directors expect that the adoption of the standards above will have no material impact
on the financial statements in the period of initial application.
2.4

Basis of consolidation and business combination(a)Basis of consolidation
The consolidated financial statements comprise the financial statements of theCompany and its subsidiaries as at the end of the reporting period. The financial
statements of the subsidiaries used in the preparation of the consolidated financial
statements are prepared for the same reporting date as the Company. Consistentaccounting policies are applied to like transactions and events in similar
circumstances.
Control is achieved when the Group is exposed, or has rights, to variable returns fromits involvement with the investee and has the ability to affect those returns through its
power over the investee. Specifically, the Group controls an investee if, and only if, theGroup has:-Power over the investee (i.e., existing rights that give it the current ability to direct
the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns

B-12

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.4

Basis of consolidation and business combination (cont’d)(a)Basis of consolidation (cont’d)Generally, there is a presumption that a majority of voting rights results in control. To
support this presumption and when the Group has less than a majority of the voting or
similar rights of an investee, the Group considers all relevant facts and circumstancesin assessing whether it has power over an investee, including:-

The contractual arrangement(s) with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts andcircumstances indicate that there are changes to one or more of the three elements ofcontrol. Consolidation of a subsidiary begins when the Group obtains control over thesubsidiary and ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year
are included in the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (“OCI”) are
attributed to the equity holders of the parent of the Group and to the non-controllinginterests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries tobring their accounting policies in line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating totransactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, isaccounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets(including goodwill), liabilities, non-controlling interest and other components of equity,
while any resultant gain or loss is recognised in profit or loss. Any investment retained
is recognised at fair value.
(b)

Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred, which ismeasured at acquisition date fair value, and the amount of any non-controlling interestsin the acquiree. For each business combination, the Group elects whether to measure
the non-controlling interests in the acquiree at fair value or at the proportionate shareof the acquiree’s identifiable net assets. Acquisition-related costs are expensed as
incurred and included in administrative expenses.

B-13

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.4

Basis of consolidation and business combination (cont’d)(b)Business combinations and goodwill (cont’d)
The Group determines that it has acquired a business when the acquired set of
activities and assets include an input and a substantive process that together
significantly contribute to the ability to create outputs. The acquired process is
considered substantive if it is critical to the ability to continue producing outputs, andthe inputs acquired include an organised workforce with the necessary skills,
knowledge, or experience to perform that process or it significantly contributes to theability to continue producing outputs and is considered unique or scarce or cannot be
replaced without significant cost, effort, or delay in the ability to continue producing
outputs.
When the Group acquires a business, it assesses the financial assets and liabilities
assumed for appropriate classification and designation in accordance with thecontractual terms, economic circumstances and pertinent conditions as at theacquisition date. This includes the separation of embedded derivatives in hostcontracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised atfair value at the acquisition date. Contingent consideration classified as equity is notremeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability that is a financial instrument and within
the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes
in fair value recognised in profit or loss in accordance with IFRS 9. Other contingent
consideration that is not within the scope of IFRS 9 is measured at fair value at eachreporting date with changes in fair value recognised in profit or loss.
Goodwill is initially measured at cost (being the excess of the aggregate of theconsideration transferred and the amount recognised for non-controlling interests andany previous interest held over the net identifiable assets acquired and liabilities
assumed). If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Group re-assesses whether it has correctly identified allof the assets acquired and all of the liabilities assumed and reviews the procedures
used to measure the amounts to be recognised at the acquisition date. If thereassessment still results in an excess of the fair value of net assets acquired over theaggregate consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment
losses. For the purpose of impairment testing, goodwill acquired in a businesscombination is, from the acquisition date, allocated to each of the Group’s cashgenerating units that are expected to benefit from the combination, irrespective ofwhether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit (“CGU”) and part of theoperation within that unit is disposed of, the goodwill associated with the disposed
operation is included in the carrying amount of the operation when determining thegain or loss on disposal. Goodwill disposed in these circumstances is measured basedon the relative values of the disposed operation and the portion of the cash-generating
unit retained.

B-14

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.5

Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or
indirectly, to owners of the Company.
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss ofcontrol are accounted for as equity transactions. In such circumstances, the carrying
amounts of the controlling and non-controlling interests are adjusted to reflect the changes
in their relative interests in the subsidiary. Any difference between the amount by which the
non-controlling interest is adjusted and the fair value of the consideration paid or received isrecognised directly in equity and attributed to owners of the Company.

2.6

Foreign currency
The Group’s consolidated financial statements are presented in USD, which is also theCompany’s functional currency. Each entity of the Group determines its own functional
currency and items included in the financial statements of each entity are measured usingthat functional currency. The Group uses the direct method of consolidation and on disposalof a foreign operation, the gain or loss that is reclassified to profit or loss reflects the amountthat arises from using this method.
(a)Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at theirrespective functional currency spot rates at the date the transaction first qualifies forrecognition. Monetary assets and liabilities denominated in foreign currencies aretranslated at the functional currency spot rates of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in
profit or loss with the exception of monetary items that are designated as part of thehedge of the Group’s net investment in a foreign operation. These are recognised in
OCI until the net investment is disposed of, at which time, the cumulative amount is
reclassified to profit or loss. Tax charges and credits attributable to exchange
differences on those monetary items are also recognised in OCI.
Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rates at the dates of the initial transactions. Nonmonetary items measured at fair value in a foreign currency are translated using theexchange rates at the date when the fair value is determined. The gain or loss arisingon translation of non-monetary items measured at fair value is treated in line with therecognition of the gain or loss on the change in fair value of the item (i.e., translationdifferences on items whose fair value gain or loss is recognised in OCI or profit or loss
are also recognised in OCI or profit or loss, respectively).

B-15

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.6

Foreign currency (cont’d)(b)Consolidated financial statements
On consolidation, the assets and liabilities of foreign operations are translated into US
dollars at the rate of exchange prevailing at the reporting date and their statements ofprofit or loss are translated at exchange rates prevailing at the dates of the transactions.
The exchange differences arising on translation for consolidation are recognised in
OCI. On disposal of a foreign operation, the component of OCI relating to that particularforeign operation is reclassified to profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value
adjustments to the carrying amounts of assets and liabilities arising on the acquisition
are treated as assets and liabilities of the foreign operation and translated at the spot
rate of exchange at the reporting date.

2.7

Current and non-current classification
The Group presents assets and liabilities in the balance sheet based on current/non-current
classification. An asset is current when it is:-

Expected to be realised or intended to be sold or consumed in the normal operating
cycle
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period or
Cash or cash equivalent unless restricted from being exchanged or used to settle aliability for at least twelve months after the reporting period

All other assets are classified as non-current.
A liability is current when:-

It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period or
There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period

The terms of the liability that could, at the option of the counterparty, result in its settlementby the issue of equity instruments do not affect its classification.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.

B-16

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.8

Property, plant and equipment
Construction in progress is stated at cost, net of accumulated impairment losses, if any. Plant
and equipment is stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. Such cost includes the cost of replacing part of the plant andequipment and borrowing costs for long-term construction projects if the recognition criteria
are met. When significant parts of plant and equipment are required to be replaced atintervals, the Group depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amountof the plant and equipment as a replacement if the recognition criteria are satisfied. All otherrepair and maintenance costs are recognised in profit or loss as incurred. The present valueof the expected cost for the decommissioning of an asset after its use is included in the costof the respective asset if the recognition criteria for a provision are met.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets,
as follows:
Office equipment
Leasehold improvements

2 to 5 years
3 to 5 years

Assets under construction included in property, plant and equipment are not depreciated asthese assets are not yet available for use.
An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss when the asset isderecognised.
The residual values, useful lives and methods of depreciation of property, plant andequipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
2.9

LeasesThe Group assesses at contract inception whether a contract is, or contains, a lease. Thatis, if the contract conveys the right to control the use of an identified asset for a period of timein exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for
short-term leases and leases of low-value assets. The Group recognises lease liabilities tomake lease payments and right-of-use assets representing the right to use the underlying
assets.

B-17

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.9

Leases (cont’d)Group as a lessee (cont’d)(i)Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e.,the date the underlying asset is available for use). Right-of-use assets are measured
at cost, less any accumulated depreciation and impairment losses, and adjusted forany remeasurement of lease liabilities. The cost of right-of-use assets includes theamount of lease liabilities recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives received. Rightof-use assets are depreciated on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets, as follows:
Buildings
Motor vehicles

2 to 6 years
3 years

If ownership of the leased asset transfers to the Group at the end of the lease term or
the cost reflects the exercise of a purchase option, depreciation is calculated using theestimated useful life of the asset.
The right-of-use assets are also subject to impairment. The accounting policy for
impairment is disclosed in Note 2.11.
(ii)

Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease term. The
lease payments include fixed payments (including in-substance fixed payments) lessany lease incentives receivable, variable lease payments that depend on an index ora rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to
be exercised by the Group and payments of penalties for terminating the lease, if thelease term reflects the Group exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognised as
expenses (unless they are incurred to produce inventories) in the period in which theevent or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental
borrowing rate at the lease commencement date because the interest rate implicit in
the lease is not readily determinable. After the commencement date, the amount oflease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a change in the lease payments(e.g., changes to future payments resulting from a change in an index or rate used todetermine such lease payments) or a change in the assessment of an option topurchase the underlying asset.

B-18

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.9

Leases (cont’d)Group as a lessee (cont’d)(iii)

Short-term leases and leases for low-value assets
The Group applies the short-term lease recognition exemption to its short-term leasesof machinery and equipment (i.e., those leases that have a lease term of 12 months orless from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of officeequipment that are considered to be low value. Lease payments on short-term leases
and leases of low-value assets are recognised as expense on a straight-line basis overthe lease term.

2.10

Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost ofintangible assets acquired in a business combination is their fair value at the date ofacquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed
for impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an intangible asset with a finite
useful life are reviewed at least at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in
the asset are considered to modify the amortisation period or method, as appropriate, andare treated as changes in accounting estimates. The amortisation expense on intangible
assets with finite lives is recognised in profit or loss in the expense category that is consistent
with the function of the intangible assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment
annually, either individually or at the cash-generating unit level. The assessment of indefinite
life is reviewed annually to determine whether the indefinite life continues to be supportable.
If not, the change in useful life from indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains
control) or when no future economic benefits are expected from its use or disposal. Any gainor loss arising upon derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in profit or loss.

B-19

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.10

Intangible assets (cont’d)(a)Trademarks
Trademarks are stated at acquisition cost. Trademarks have a finite useful life and areamortised on a straight-line basis over their estimated useful lives of 1 to 10 years.

(b)

Technology
Technology is stated at acquisition cost and amortised on a straight-line basis over its
estimated useful life of 1 to 3 years.

(c)User baseUser base is stated at acquisition cost and amortised on a straight-line basis over its
estimated useful life of 1 to 4 years.

(d)Exclusive right to operate 17 app in Japan
Exclusive right is stated at acquisition cost and amortised on a straight-line basis overits estimated useful life of 5.5 years.

(e)

Domain
Domain is stated at acquisition cost and amortised on a straight-line basis over its
estimated useful life of 5 years.

2.11

Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset
may be impaired. If any indication exists, or when annual impairment testing for an asset isrequired, the Group estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in
use. The recoverable amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groupsof assets. When the carrying amount of an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time valueof money and the risks specific to the asset. In determining fair value less costs of disposal,
recent market transactions are taken into account. If no such transactions can be identified,an appropriate valuation model is used. These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded companies or other available fair value
indicators.
The Group bases its impairment calculation on most recent budgets and forecast calculations,which are prepared separately for each of the Group’s CGUs to which the individual assets
are allocated. These budgets and forecast calculations generally cover a period of five years.
A long-term growth rate is calculated and applied to project future cash flows after the fifth
year.

B-20

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.11

Impairment of non-financial assets (cont’d)
Impairment losses are recognised in profit or loss.
For assets excluding goodwill, an assessment is made at each reporting date to determine
whether there is an indication that previously recognised impairment losses no longer existor have decreased. If such indication exists, the Group estimates the asset’s or CGU’s
recoverable amount. A previously recognised impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset’s recoverable amount since
the last impairment loss was recognised. The reversal is limited so that the carrying amountof the asset does not exceed its recoverable amount, nor exceed the carrying amount thatwould have been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in profit or loss unless the asset iscarried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Goodwill is tested for impairment annually as at end of the reporting period and whencircumstances indicate that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU(or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU
is less than its carrying amount, an impairment loss is recognised. Impairment losses relating
to goodwill cannot be reversed in future periods.

2.12

Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee
when it is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee.

2.13

Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and afinancial liability or equity instrument of another entity.
(a)Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured atamortised cost, fair value through OCI, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial
asset’s contractual cash flow characteristics and the Group’s business model for
managing them. With the exception of trade receivables that do not contain asignificant financing component or for which the Group has applied the practical
expedient, the Group initially measures a financial asset at its fair value plus, in thecase of a financial asset not at fair value through profit or loss, transaction costs.

B-21

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.13

Financial instruments (cont’d)(a)Financial assets (cont’d)
Initial recognition and measurement (cont’d)
In order for a financial asset to be classified and measured at amortised cost or fairvalue through OCI, it needs to give rise to cash flows that are ‘solely payments ofprincipal and interest’ (“SPPI”) on the principal amount outstanding. This assessment
is referred to as the SPPI test and is performed at an instrument level. Financial assets
with cash flows that are not SPPI are classified and measured at fair value throughprofit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages
its financial assets in order to generate cash flows. The business model determines
whether cash flows will result from collecting contractual cash flows, selling thefinancial assets, or both. Financial assets classified and measured at amortised cost
are held within a business model with the objective to hold financial assets in order tocollect contractual cash flows while financial assets classified and measured at fairvalue through OCI are held within a business model with the objective of both holding
to collect contractual cash flows and selling.
Subsequent measurement
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective
interest (“EIR”) method and are subject to impairment. Gains and losses arerecognised in profit or loss when the asset is derecognised, modified or impaired.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the balance sheet atfair value with net changes in fair value recognised in profit or loss.
This category includes derivative instruments and listed equity investments which theGroup had not irrevocably elected to classify at fair value through OCI. Dividends onlisted equity investments are recognised as other income in profit or loss when the rightof payment has been established.
Derecognition
A financial asset is derecognised where the contractual right to receive cash flows fromthe asset has expired. On derecognition of a financial asset in its entirety, the difference
between the carrying amount and the sum of the consideration received and any
cumulative gain or loss that had been recognised in other comprehensive income fordebt instruments is recognised in profit or loss.

B-22

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.13

Financial instruments (cont’d)(b)Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans andborrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value
through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purposeof repurchasing in the near term. This category also includes derivative financial
instruments entered into by the Group that are not designated as hedging instruments
in hedge relationships as defined by IFRS 9. Separated embedded derivatives are alsoclassified as held for trading unless they are designated as effective hedging
instruments.
Gains or losses on liabilities held for trading are recognised in profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss
are designated at the initial date of recognition, and only if the criteria in IFRS 9 aresatisfied.
Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised
in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation
is included as finance costs in profit or loss.

B-23

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.13

Financial instruments (cont’d)(b)Financial liabilities (cont’d)Derecognition
A financial liability is derecognised when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another fromthe same lender on substantially different terms, or the terms of an existing liability aresubstantially modified, such an exchange or modification is treated as thederecognition of the original liability and the recognition of a new liability. The differencein the respective carrying amounts is recognised in profit or loss.

2.14

Impairment of financial instruments
The Group recognises an allowance for expected credit losses (“ECLs”) for all debt
instruments not held at fair value through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance with the contract and all the cash
flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale ofcollateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been asignificant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12 months (a 12-month ECL).
For those credit exposures for which there has been a significant increase in credit risk sinceinitial recognition, a loss allowance is required for credit losses expected over the remaining
life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach incalculating ECLs. Therefore, the Group does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has
established a provision matrix that is based on its historical credit loss experience, adjusted
for forward-looking factors specific to the debtors and the economic environment.

2.15

Cash and cash equivalents
Cash and cash comprise cash at banks and on hand and short-term highly liquid deposits
with a maturity of three months or less, that are readily convertible to a known amount ofcash and subject to an insignificant risk of changes in value.
For the purpose of the consolidated statements of cash flows, cash and cash equivalents
consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts
as they are considered an integral part of the Group’s cash management.

B-24

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.16

Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of theamount of the obligation. When the Group expects some or all of a provision to be reimbursed,
for example, under an insurance contract, the reimbursement is recognised as a separate
asset, but only when the reimbursement is virtually certain. The expense relating to a
provision is presented in profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time is recognised as a finance
cost.

2.17

Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use or saleare capitalised as part of the cost of the asset. All other borrowing costs are expensed in the
period in which they occur. Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.

2.18

Convertible preference shares
Convertible preference shares with conversion option are accounted for as financial liability
with an embedded equity conversion derivative based on the terms of the contract. On
issuance of the convertible preference shares, the Group has elected to measure the entire
instrument at fair value, with subsequent changes in fair value recognised in profit or loss.
When a conversion option is exercised, the financial liability is derecognised with acorresponding recognition of share capital.

2.19

Employee benefits(a)Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of thecountries in which it has operations. Contributions to defined contribution plans arerecognised as an expense in the period in which the related service is performed.

(b)

Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of thebenefits expected to be paid in respect of service rendered by employees. They arerecognised as an expense in the period in which the related service is performed.

B-25

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.20

Share-based payments
Employees (including senior executives) of the Group receive remuneration in the form ofshare-based payments, whereby employees render services in exchange for equity
instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the
grant is made using an appropriate valuation model, further details of which are given in Note
24.
That cost is recognised in employee benefits expense (Note 7), together with acorresponding increase in equity (other capital reserves), over the period in which the service
and, where applicable, the performance conditions are fulfilled (the vesting period). The
cumulative expense recognised for equity-settled transactions at each reporting date untilthe vesting date reflects the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately vest. The expense orcredit in profit or loss for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the conditions being met
is assessed as part of the Group’s best estimate of the number of equity instruments that will
ultimately vest. Market performance conditions are reflected within the grant date fair value.
Any other conditions attached to an award, but without an associated service requirement,
are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fairvalue of an award and lead to an immediate expensing of an award unless there are also
service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market
performance and/or service conditions have not been met. Where awards include a market
or non-vesting condition, the transactions are treated as vested irrespective of whether themarket or non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised
is the grant date fair value of the unmodified award, provided the original vesting terms of theaward are met. An additional expense, measured as at the date of modification, is recognised
for any modification that increases the total fair value of the share-based payment transaction,or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by
the counterparty, any remaining element of the fair value of the award is expensed
immediately through profit or loss.

B-26

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.21

Revenue
The Group generates revenue from live streaming and live-commerce. Revenue from live
streaming is generated from the “17LIVE” platform. Revenue is recognised upon transfer ofthe promised virtual items to the users.
The Group operates live streaming with virtual points system where users can directly
purchase virtual points or membership subscription on platforms or pay via online payment
systems provided by third parties including payments using mobile phone, internet
debit/credit card payment and other third party payment systems. The virtual points can besolely used to convert into virtual items on live streaming channels. Virtual points sold but
not yet consumed by the purchasers are recorded as “Contract liabilities” and upon
conversion, is recognised as revenue. Users are generally not entitled to any refund for thepurchase of such virtual points and virtual items.
Virtual points can be sold in bundled packages, and the sales price is proportionally allocatedto each virtual point based on the total package price, and recognised as revenue upon
utilisation.
Any virtual points purchased by a user in Japan and not used will expire after a year andrevenues from these virtual points will be recognised by the Group at such time. For users inother countries, any virtual points purchased do not expire.
Live streaming
Revenue from live streaming is generated from the “17LIVE” platform. The Group createsand offers virtual items to be purchased by users on live streaming channels, which the Group
operates and maintains. Users are required to first purchase virtual points and use thosevirtual points to purchase virtual items based on specified prices as predetermined by theGroup. Users purchase virtual items from the Group and gift them to performers (i.e. live
streamers and V-Livers) to show support for their favourite performers.
Virtual points are removed from users’ wallets and extinguished after being consumed by theusers (i.e. by way of virtual gifting to the performers). Accordingly, amounts received from thesale of virtual points are first recorded as contract liabilities. For virtual items, revenue isrecognised upon consumption by the users. The Group does not have further obligations tothe user after the virtual items are consumed.
The Group recognises revenue on a gross basis from the sale of virtual items on the platform,
as the Group produces and controls virtual items before they are transferred to the users,
the prices of virtual items are set by the Group, and the Group is also exposed to the related
credit risk, which is generally not recoverable from the performers.
In order to attract user traffic, the Group shares revenues with performers in accordance withthe revenue sharing arrangements with the Group. The portion of revenue shared with theperformers are accounted for as cost of revenue by the Group. If virtual points are provided
to users free of charge for marketing purpose, the Group does not recognise any revenue
when users convert it to virtual items. Based on the Group’s revenue sharing arrangements,
the expected amount to be paid to the live streamers when such free virtual points are utilised
is recognised as cost of revenue.

B-27

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.21

Revenue (cont’d)
Live streaming (cont’d)
Users can join the fan group of their favourite live streamers and become part of their corecommunity by paying a subscription fee on a monthly basis and becoming an “armysubscriber”. The subscription fee is collected upfront from subscribers. The receipt of therevenue is initially recorded as contract liabilities and revenue is recognised over the periodof the subscription.
Live-commerce
The Group operates its live commerce business through HandsUp, a platform that allows
merchants to sell their products through live streaming in Japan, and OrderPally, a businessto-business live commerce matching and order management platform connecting merchantsand users in Taiwan. Revenue from live-commerce is recognised in the period in which theservices are rendered.

2.22

Cost of revenue
Cost of revenue relates to direct expenses incurred in order to generate revenue. Such costs
are recorded as incurred. Cost of revenues consists primarily of (i) revenue sharing fees andcontent costs, including cash payments to various performers, and content providers, (ii)server and bandwidth costs, (iii) channel costs, (iv) commission costs, and (v) other costs
such as amortisation/impairment of intangible assets.

2.23

Taxes
(a)

Current income tax
Current income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used tocompute the amount are those that are enacted or substantively enacted at thereporting date in the countries where the Group operates and generates taxable
income.
Current income tax relating to items recognised directly in equity is recognised in equity
and not in profit or loss. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject tointerpretation and establishes provisions where appropriate.

B-28

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.23

Taxes (cont’d)(b)Deferred tax
Deferred tax is provided using the liability method on temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:-

When the deferred tax liability arises from the initial recognition of goodwill or an
asset or liability in a transaction that is not a business combination and, at thetime of the transaction, affects neither the accounting profit nor taxable profit orloss; and-In respect of taxable temporary differences associated with investments in
subsidiaries, where the timing of the reversal of the temporary differences canbe controlled and it is probable that the temporary differences will not reverse in
the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carryforward of unused tax credits and any unused tax losses. Deferred tax assets arerecognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised, except:-

When the deferred tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is nota business combination and, at the time of the transaction, affects neither theaccounting profit nor taxable profit or loss; and-In respect of deductible temporary differences associated with investments in
subsidiaries, deferred tax assets are recognised only to the extent that it isprobable that the temporary differences will reverse in the foreseeable future andtaxable profit will be available against which the temporary differences can beutilised.

The carrying amount of deferred tax assets is reviewed at each reporting date andreduced to the extent that it is no longer probable that sufficient taxable profit will beavailable to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting date and are recognised to theextent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
In assessing the recoverability of deferred tax assets, the Group relies on the same
forecast assumptions used elsewhere in the financial statements and in othermanagement reports, which, among other things, reflect the potential impact ofclimate-related development on the business, such as increased cost of production asa result of measures to reduce carbon emission.

B-29

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

2.

Summary of significant accounting policies (cont’d)

2.23

Taxes (cont’d)(b)Deferred tax (cont’d)Deferred tax assets and liabilities are measured at the tax rates that are expected toapply in the year when the asset is realised or the liability is settled, based on tax rates(and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss. Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying the criteria
for separate recognition at that date, are recognised subsequently if new information
about facts and circumstances change. The adjustment is either treated as a reduction
in goodwill (as long as it does not exceed goodwill) if it was incurred during themeasurement period or recognised in profit or loss.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has alegally enforceable right to set off current tax assets and current tax liabilities and thedeferred tax assets and deferred tax liabilities relate to income taxes levied by thesame taxation authority on either the same taxable entity or different taxable entities
which intend either to settle current tax liabilities and assets on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each future period in whichsignificant amounts of deferred tax liabilities or assets are expected to be settled or
recovered.

(c)

Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:-

2.24

Where the sales tax incurred on a purchase of assets or services is notrecoverable from the taxation authority, in which case the sales tax is recognisedas part of the cost of acquisition of the asset or as part of the expense item asapplicable; andReceivables and payables that are stated with the amount of sales tax included.

Share capital and share issuance expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity.
Incremental costs directly attributable to the issuance of ordinary shares are deductedagainst share capital.

B-30

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

3.

Significant accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management tomake judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of eachreporting period. Uncertainty about these assumptions and estimates could result inoutcomes that require a material adjustment to the carrying amount of the asset or liability
affected in the future periods.
Judgements made in applying accounting policies
Management is of the opinion that there is no significant judgement made in applying theaccounting policies.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty
at the end of the reporting period are discussed below. The Group based its assumptions
and estimates on parameters available when the financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change
due to market changes or circumstances arising beyond the control of the Group. Suchchanges are reflected in the assumptions when they occur.
(a)

Impairment of goodwill
As disclosed in Note 14 to the financial statements, the recoverable amounts of the
cash generating units which goodwill has been allocated to are determined based onvalue in use calculations. The value in use calculations are based on a discounted
cash flow models. The recoverable amount is most sensitive to the discount rate used
for the discounted cash flow model as well as the expected future cash inflows and thegrowth rate used for extrapolation purposes. The key assumptions applied in thedetermination of the value in use including a sensitivity analysis, are disclosed andfurther explained in Note 14 to the financial statements.
The carrying amount of goodwill as at 30 June 2023 was US$23,988,594 (31December 2022: US$23,988,594).

(b)

Fair value measurement of preference shares
The fair value of convertible preference shares is determined by considering theGroup’s recent funding raising activities and the fair value assessment of comparable
companies at the end of the reporting period. The significant inputs used in thedetermination of the fair value of preference shares are disclosed and further explainedin Note 28 to the financial statements.
As at 30 June 2023, the carrying amount of the Group’s convertible preference shares
was US$337,749,391 (31 December 2022: US$210,515,456).

B-31

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

4.

Revenue

Revenue from contracts with customers
Liver live streaming
V-liver live streaming
OthersTiming of revenue recognition
At a point in time
Over time

30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)

146,038,201
1,544,578
3,401,749

195,610,710
1,853,581
2,957,124

150,984,528

200,421,415

143,536,417
7,448,111

188,331,439
12,089,976

150,984,528

200,421,415

Other revenue primarily comprises revenue from live-commerce and Wave App.
Contract liabilities
The Group has recognised the following contract liabilities in relation to revenue fromcontracts with customers:
31 December
30 June
2023
2022
US$
US$
(Unaudited)(Audited)Contract liabilities – Live streaming
Others

Revenue recognised for the six-month periods ended
30 June 2023 and 2022

B-32

6,407,812
452,498

6,893,091
380,8436,860,310

7,273,934

4,357,032

5,833,681

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

5.

Cost of revenue

Revenue sharing fees and live streaming costs
Channel costs
Server and bandwidth costs
Others

6.

30 June2022
US$(Unaudited)

64,804,184
13,489,535
8,932,316
699,581

101,296,040
22,777,643
10,585,195
280,577

87,925,616

134,939,455

30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)

15,050,652
21,313,103
2,387,609
6,248,587
3,024,218
2,028,486

25,218,630
25,133,673
2,743,806
6,548,943
2,960,026
1,741,471

50,052,655

64,346,549

30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)

19,496,562
1,083,641
351,601
286,164
95,135

22,598,451
1,497,061
470,486
436,552
131,123

21,313,103

25,133,673

Operating expenses

Marketing expenses
Employee benefits expense
Depreciation and amortisation
Professional fees
Software and service fees
Others

7.

30 June2023
US$(Unaudited)

Employee benefits expense

Wages and salaries
Contribution to defined contribution plans
Share-based payments
Labour and health insurance fees
Other personnel expenses

B-33

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

8.

9.

10.

Other gains and losses
30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)

Revaluation loss on:- Preference shares- Warrants(127,213,235)(436,000)(37,822,667)(191,000)

Loss on disposal of property, plant and equipment
Foreign exchange (loss)/gain
Gain on termination of leases
Others(127,649,235)(339,744)(637,915)
3,942
335,258(38,013,667)(128,461)
3,015,857
22,592
246,573(128,287,694)(34,857,106)

30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)

Interest expense on:- Loans and borrowings- Lease liabilitiesí
51,684

6,261
100,184

Unwinding of discount on provisions

51,684
2,079

106,445
3,222

Total finance costs

53,763

109,667

Finance costs

Income tax expense
The major components of income tax expense recognised in profit or loss for the six-month
periods ended 30 June 2023 and 2022 were:
30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)

Current tax:
- Current year

4,360,568

8,157,526

Deferred tax:
- Origination and reversal of temporary differences(1,451,005)(14,741)

Income tax expense recognised in profit or loss

2,909,563

8,142,785

B-34

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

10.

Income tax expense (cont’d)Relationship between tax expense and accounting loss
A reconciliation between tax expense and the product of accounting loss multiplied by theapplicable corporate tax rate for the six-month periods ended 30 June 2023 and 2022 wereas follows:

Loss before tax

30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)(115,335,200)(33,831,362)

Tax at the domestic rates applicable to countries where theGroup operates
Adjustments:
Non-deductible expenses
Income not subject to taxation
Deferred tax assets not recognised
Benefits from previously unrecognised tax losses
Others3,503,160

6,010,520

317,124(789,073)
1,361,679(1,597,454)
114,127

519,328(863,518)
2,067,769–
408,686

Income tax expense recognised in profit or loss

2,909,563

8,142,785

The above reconciliation is prepared by aggregating separate reconciliation for each national
jurisdiction. The Group principally operates in Taiwan and Japan, which have prevailing
corporate tax rates of 20% and 36.8%, respectively.
11.

Earnings per share
Basic earnings per share is calculated by dividing the loss attributable to owners of theCompany by the weighted average number of ordinary shares outstanding during thefinancial period.

Loss attributable to owners of the Company (US$)
Weighted average number of ordinary shares outstanding forbasic earnings per share computation
Basic earnings per share computation (US$ per share)

30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)(118,244,763)(41,974,147)

37,923,882

37,923,882(3.12)(1.11)

Diluted earnings per share are similar to basic earnings per share as there were no potential
dilutive ordinary shares existing during the respective financial period.

B-35

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

12.

Property, plant and equipment
Officeequipment
US$

LeaseholdConstruction
improvements in progress
US$
US$

Total
US$

Cost
At 1 January 2022
Additions
Disposals
Transfer
Exchange differences

1,338,866
268,355(506,951)–(112,808)

1,650,565
9,286(1,457,797)
152,735(122,039)–
160,420–(152,735)(243)

2,989,431
438,061(1,964,748)–(235,090)

At 31 December 2022 and1 January 2023
Additions
Disposals
Transfer
Exchange differences

987,462
15,993(539,714)
355,300(22,809)

232,750––
585,039(19,956)

7,442
948,150–(940,339)(251)

1,227,654
964,143(539,714)–(43,016)

At 30 June 2023 (Unaudited)

796,232

797,833

15,002

1,609,067

Accumulated depreciation
At 1 January 2022
Depreciation
Disposals
Exchange differences

622,634
286,252(439,300)(44,772)

349,164
211,919(530,083)(23,949)––––

971,798
498,171(969,383)(68,721)

At 31 December 2022 and1 January 2023
Depreciation
Disposals
Exchange differences

424,814140,112(199,970)(11,235)

7,051
63,532–(1,956)––––

431,865
203,644(199,970)(13,191)

At 30 June 2023 (Unaudited)353,721

68,627–422,348

Net carrying amountAt 31 December 2022 (Audited)562,648

225,699

7,442

795,789

At 30 June 2023 (Unaudited)

442,511729,206

15,002

1,186,719

The property, plant and equipment were not pledged to others as collaterals.

B-36

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

13.

LeasesThe Group has lease contracts for buildings and motor vehicles. Leases of buildings
generally have lease terms between 2 to 4 years, while motor vehicles generally have leaseterms of 3 years. The Group is restricted from assigning and subleasing the leased assets.
There are no externally imposed covenants on these lease agreements.
The Group also has certain leases of billboards with lease terms of 12 months or less. The
Company applies the ‘short-term lease’ recognition exemptions for these leases.
(a)Right-of-use assets
The carrying amounts of right-of-use assets recognised and the movements during theyear are as follows:
Buildings
US$

Motor
vehicles
US$

Total
US$

At 1 January 2022
Additions
Disposals
Depreciation
Exchange differences

8,114,534
1,406,808(4,968,251)(2,088,371)(683,551)–
73,352–(4,075)(2,181)

8,114,534
1,480,160(4,968,251)(2,092,446)(685,732)

At 31 December 2022 and 1 January 2023
Additions
Disposals
Depreciation
Exchange differences

1,781,169
2,587,982(72,637)(838,225)(107,580)

67,096––(11,903)(701)

1,848,265
2,587,982(72,637)(850,128)(108,281)

At 30 June 2023 (Unaudited)

3,350,709

54,492

3,405,201

The disposals of right-of-use assets during the financial year ended 31 December 2022
relates mainly to the Group’s relocation of its office premises in Taiwan.

B-37

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

13.

Leases (cont’d)(b)Lease liabilities
The carrying amount of lease liabilities and the movements during the year are as
follows:
30 June2023
US$(Unaudited)

31 December
2022
US$(Audited)

At 1 January
Additions
Disposals
Accretion of interest
Payments
Exchange differences

1,932,482
2,376,130(76,579)
51,684(791,382)(104,667)

9,069,417
1,480,160(5,307,247)
164,210(3,018,333)(455,725)

At 30 June 2023/31 December 2022

3,387,668

1,932,482

Current
Non-current

1,614,677
1,772,991

920,219
1,012,263

3,387,668

1,932,482

The disposals of lease liabilities during the financial year ended 31 December 2022
relates mainly to the Group’s relocation of its office premises in Taiwan.
(c)Amounts recognised in profit or loss
The amounts recognised in profit or loss in relation to leases are as follows:

Depreciation of right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases (included ingeneral and administrative expenses)(d)30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)

850,128
51,6842,092,446
100,184

49,302

15,451

Total cash outflows
For the six-month periods ended 30 June 2023 and 30 June 2022, the Group’s total
cash outflows for leases were US$840,684 and US$1,455,000 respectively.

B-38

14.

B-39

At 30 June 2023 (Unaudited)

Net carrying amountAt 31 December 2022

At 30 June 2023 (Unaudited)

901,516

1,983,335

10,998,484

9,916,665
1,081,819–

At 31 December 2022 and1 January 2023
Amortisation
Exchange differences

11,900,000

At 30 June 2023 (Unaudited)

7,753,029
2,163,636–

11,900,000–

At 31 December 2022 and1 January 2023
Exchange differences

Accumulated amortisation andimpairment
At 1 January 2022
Amortisation
Exchange differences

11,900,000
–
–

2,860

3,385

546,364

546,995
487(1,118)537,050
1,796
8,149

549,224

550,380(1,156)554,090–(3,710)Exclusive rightto operate 17
app in Japan Trademarks
US$
US$

Cost
At 1 January 2022
AdditionsExchange differences

Intangible assets

Notes to financial statements
For the six-month period ended 30 June 2023

17LIVE Inc. and its subsidiaries––

7,411,539

7,411,539––

7,411,539––

7,411,539

7,411,539–

7,411,539––

Technology
US$23,988,594

23,988,594

77,204,319

77,204,319––

77,204,319––

101,192,913

101,192,913–

101,192,913––

GoodwillUS$

149,135

186,846

7,485,232

7,469,328
24,368(8,464)

7,442,726
29,305(2,703)7,634,367

7,656,174(21,807)

7,557,942
117,267(19,035)

User baseUS$146,787

380,968

289,098

104,826
227,163(42,891)

35,381
106,223(36,778)435,885

485,794(49,909)

192,068
350,591(56,865)

DomainUS$

25,188,892

26,543,128

103,935,036

102,653,672
1,333,837(52,473)

100,384,044
2,300,960(31,332)

129,123,928

129,196,800(72,872)

128,808,552
467,858(79,610)

Total
US$

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

14.

Intangible assets (cont’d)
The intangible assets were not pledged to others as collaterals.
Amortisation expense
The amortisation expense of intangible assets is included in “General and administrative
expenses” in profit or loss.
As of 30 June 2023, exclusive right has a remaining amortisation of less than one year.
Impairment testing of goodwill for year ended 31 December 2022
Goodwill acquired through business combinations has been allocated to cash–generating
units (“CGU”) for impairment testing as follows:-

17LIVE Japan Inc. (“17LIVE Japan)
Next Entertainment Global Holding (“MeMe”)
Ichi Nana Inc. (“Ichi Nana”)

The carrying amounts of goodwill allocated to each CGU are as follows:

17LIVE JapanMeMe
Ichi Nana

30 June2023
US$(Unaudited)

31 December
2022
US$(Audited)

23,988,594
íí

23,988,594
íí

23,988,594

23,988,594

17LIVE JapanFor 17LIVE Japan, the recoverable amount of the CGU has been determined based onvalue-in-use calculations using cash flow projections from financial budgets approved bymanagement covering a five-year period.
The key assumptions used for value-in-use calculations are as follows:
30 June31 December
2023
2022
(Unaudited)(Audited)
17LIVE Japan:
Gross margin
Terminal growth rate
Pre-tax discount rate

50.00%
0.80%
25.00%

50.00%
0.80%
25.00%

Management determined budgeted gross margin based on past performance and its
expectations of market development. The weighted average growth rates used areconsistent with the forecasts included in industry reports. The discount rate used is pre-tax
and reflect specific risks relating to the CGU.

B-40

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

14.

Intangible assets (cont’d)
Impairment testing of goodwill (cont’d)Sensitivity to changes in assumptions
With regards to the assessment of value-in-use for 17LIVE Japan, management believes
that no reasonably possible changes in any of the above key assumptions would cause thecarrying value of the CGU to materially exceed its recoverable amount.
MeMe
Impairment loss recognised
In the previous financial years, goodwill relating to the MeMe CGU, which amounted to
US$10,594,732, had been fully impaired.
Ichi Nana
Impairment loss recognised
In the previous financial years, goodwill relating to the Ichi Nana CGU, which amounted to
US$66,609,587, had been fully impaired.

15.

Deferred tax assets and liabilities
Movements in deferred tax assets and liabilities during the financial period/year were as
follows
30 June 2023
(Unaudited)Net
Recognised
in profit or exchange
differences
1 Januaryloss
Deferred tax assets:
Temporary differences:
Business tax
Accrued expenses
Unrealised exchange gain
Others30 June

US$

US$

US$

US$

494,458
1,037,741
í
5,614(85,254)442,686
580,338(2,179)(37,369)(122,278)(11,044)(338)

371,835
1,358,149
569,294
3,097

1,537,813

935,591(171,029)

2,302,375

263,035
460,133
132,422(264,432)(250,982)
í

1,397
í
(11,618)

í
209,151
120,804

855,590(515,414)(10,221)329,955

Deferred tax liabilities:
Temporary differences:
Unrealised exchange loss
Business combination
OthersB-41

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

15.

Deferred tax assets and liabilities (cont’d)
31 December 2022
(Audited)
Net
Recognised
31
in profit or exchange
differences December
1 Januaryloss
Deferred tax assets:
Temporary differences:
Business tax
Accrued expenses
Other

US$

US$

US$

US$

563,213
1,541,437
90,124

3,955(308,496)(68,420)(72,710)(195,200)(16,090)

494,458
1,037,741
5,614

2,194,774(372,961)(284,000)

1,537,813

291,889
962,096
152,039(61)(501,963)
í

(28,793)í
(19,617)

263,035
460,133
132,422

1,406,024(502,024)(48,410)855,590

Deferred tax liabilities:
Temporary differences:
Unrealised exchange loss
Business combination
Others

The expiration dates of tax losses are as follows:
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Within 5 years
5 to 10 years
More than 10 years
No expiry date

Unutilised tax losses not recognised as deferred tax assets

2,977,009
47,972,556
224,274
5,709,405

1,072,920
50,719,140
620,0026,550,862

56,883,244

58,962,924

56,883,244

58,962,924

A breakdown of the Group’s tax losses by country is as follows:

TaiwanOthers

B-42

30 June2023
US$(Unaudited)

31 December
2022
US$(Audited)

49,921,704
6,961,540

50,719,140
8,243,784

56,883,244

58,962,924

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

15.

Deferred tax assets and liabilities (cont’d)Unrecognised tax losses
At the end of the reporting period, the Group has tax losses of US$56,883,244 (31 December
2022: US$58,962,924) that are available for offset against future taxable profits of thecompanies in which the losses arose, for which no deferred tax asset is recognised due touncertainty of its recoverability. The use of these tax losses is subject to the agreement of
the tax authorities and compliance with certain provisions of the tax legislation of therespective countries in which the companies operate. Tax losses in the United States ofAmerica cannot be carried forward if there is a change in controlling shareholder, while there
are no similar restrictions imposed by the tax authorities in Taiwan or Hong Kong.
Tax losses for companies in Taiwan can be carried forward for 10 years and tax losses forcompanies in Hong Kong have no expiry dates.

16.

Other current assets
Other current assets mainly pertain to income tax receivable.

17.

Trade and other receivables
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Trade receivables
Less: Allowance for expected credit losses

Restricted deposits
Receivable from issuance of preference shares
Sales tax receivable
Other receivables

20,232,561(899,046)

24,133,554(1,270,309)

19,333,515

22,863,245

301,396657,295
124,125
135,460

284,977
710,411
26,422
168,619

20,551,791

24,053,674

Trade receivables
Trade receivables are non-interest bearing and are generally on 20 to 60 days’ terms. They
are recognised at their original invoice amounts which represent their fair values on initialrecognition.
Restricted deposits
Restricted deposits consist of term deposits placed with banks with maturity of more than 3months.

B-43

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

17.

Trade and other receivables (cont’d)
Expected credit losses
The movement in allowance for expected credit losses for trade receivables computed basedon lifetime ECL was as follows:
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
At 1 January
Written back
Written off
Exchange differences
At 30 June/31 December

1,270,309
í(356,404)(14,859)

1,374,897(1,756)(16,928)(85,904)

899,046

1,270,309

No allowance for ECL has been recognised in respect of the six-month period ended 30 June
2023 and financial year ended 31 December 2022 as management has determined that theallowance for ECL is insignificant.
The ageing analysis and ECLs for trade receivables are as follows:

Current
Less than 30 days
31 to 90 days
91 to 120 days
More than 120 days

30 June 2023
(Unaudited)
Gross
Loss
carrying
allowance
amountprovision
US$US$

31 December 2022
(Audited)
Loss
Gross
allowance
carrying
provisionamountUS$US$

19,311,646
10
15,5231,364
904,018––––
899,046

22,226,326
583,363
40,454
í
1,283,411––––
1,270,309

20,232,561

899,046

24,133,554

1,270,309

The movement in allowance for expected credit losses for other receivables computed basedon 12-month ECL was as follows:
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
At 1 January
Written off

260,384í

316,729(56,345)

At 30 June/31 December

260,384

260,384

B-44

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

18.

Cash and cash equivalents
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Cash on hand
Cash at banks

155,544
39,710,388

108,218
39,151,091

39,865,932

39,259,309

Cash at banks earns interest at floating rates based on daily bank deposit rates.
19.

Trade and other payables
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Trade payables

28,105,525

33,747,088

Other payables
Accrued operating expenses
Sales tax payable
Withholding income tax

9,380,832
6,692,387
2,184,368
896,866

7,756,687
9,297,042
7,527,780
715,320

47,259,978

59,043,917

Trade payables are non-interest bearing and are normally settled on 45 to 60 days’ terms.

B-45

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

20.

Financial liabilities at fair value through profit or loss
30 June31 December
2023
2022
(Unaudited)(Audited)
US$
US$
Current items:
Warrants
Add: Fair value adjustment

1,009,000
14,0001,009,000(422,000)

1,023,000

587,000íí

209,004,900
1,510,556

í

210,515,456

1,023,000

211,102,456

209,004,900
128,744,491

íí

337,749,391

íPreference shares
Add: Fair value adjustment

Non-current items:
Preference shares
Add: Fair value adjustment

The Group recognised a net revaluation loss on financial liabilities at fair value through profit
or loss of US$127,649,235 and US$38,013,667, and other comprehensive (loss)/gain of
US$(20,700) and US$1,900 for changes in credit risk on financial liabilities at fair value
through profit or loss for the six-month periods ended 30 June 2023 and 30 June 2022
respectively.
Warrants
The transaction and contract information of warrants is as follows:(a)

In August 2017, concurrent with the Facility Loan, warrants were issued by theCompany which can be subscribed for a total of $225,000 worth of fully paid Series B
preference shares or to receive cash consideration. The warrants will expire ten years
after the date of the issuance.
Warrants are exercisable at the option of the holder any time before the expiration
date, for all or any part of the shares of warrant (but not for a fraction of a share) that
may be purchased.

B-46

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

20.

Financial liabilities at fair value through profit or loss (cont’d)Warrants (cont’d)(b)

In August 2017 and March 2018, concurrent with the drawdown of Facility A and
Facility B Loans, warrants were issued by the Company which can be purchased for a
total of $450,000 and $600,000 worth of the same type of shares issued in theupcoming financing round.
The warrants will expire six years after the date of the issuance. The warrants are
exercisable at the option of the holder, if and when an upcoming financing occurs onor before the expiration date, for all or any part of the shares of warrant (but not for afraction of a share) that may be purchased.

(c)

In January 2020, concurrent with the drawdown of Facility C Loans, warrants were
issued by the Company and the warrants can be purchased for a total of $700,000
worth of the same type of shares issued in the upcoming financing round.
The warrants will expire five years after the date of the issuance. The warrants are
exercisable at the option of the holder, if and when an upcoming financing occurs onor before the expiration date, for all or any part of the shares of warrant (but not for afraction of a share) that may be purchased.

Preference shares
The transaction and contract information of preference shares are as follows:(a)

In March 2017, the Group issued 73,610,098 shares of Series A convertible
redeemable preference shares (the “Series A Shares”) to facilitate the share swap forthe acquisition of Ichi Nana Inc.

(b)

In August 2017 and December 2017, the Company issued 25,199,948 shares of Series
B convertible redeemable preference shares (the “Series B Shares”) at $1.2964 pershare for cash consideration of US$32,669,213.

(c)

On 16 November 2018 and 28 February 2019, the Company entered into a
Subscription Agreement to allot and issue 16,927,635 and 4,780,000 Series C
convertible redeemable preference shares (the “Series C Shares”) for a total
consideration of US$20,000,000 and US$5,647,570, respectively.

(d)

In April, July, and September 2020, the Company issued 22,222,217 shares of Series
D convertible redeemable preference shares (the “Series D Shares”) at US$1.26 pershare for a total consideration of US$28,000,000.

(e)

On 1 January 2020, the Company issued 9,964,361 shares and 1,107,156 holdback
shares of Series AA convertible non–redeemable preference shares (the “Series AA
Shares”) at US$1.2263 per share to acquire 100% shareholding of Next Entertainment
Global Holding.

B-47

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

20.

Financial liabilities at fair value through profit or loss (cont’d)Preference shares (cont’d)
The rights, preferences and privileges of the preference shares are as follows:
Redemption rights(a)

If a qualified initial public offering has not occurred before the 3rd year anniversary of
the Series D shares issuance date, holders of any Series A, B, C and D Shares may
request redemption of the preference shares of such series. On receipt of a redemption
request from the holders, the Company shall redeem all or part, as requested, of theoutstanding preference shares of such series.

(b)

The redemption prices of the Series A, B, C and D Shares shall be the entry price andissuance price respectively plus compounded interest of 8% per annum computed on
the entry price and issuance price commencing from the relevant subscription date forsuch Series A, B, C and D Shares.

(c)

The shareholders of Series AA Shares have no redemption rights to the Company
based on the signed agreement. However, based on the Shareholders’ Agreement of
the Company, the Company is obliged to redeem all or part of Series AA Shares at theapplicable amount at any time on and after the occurrence of a “Liquidation Event”.
The requirement for the Company to deliver cash to the shareholders of Series AA
Shares upon the occurrence of a “Liquidation Event” may be beyond the control of theCompany, which caused the Company not having the unconditional right to avoid
delivering cash to settle Series AA Shares. As a result, the Company accounted for
the Series AA Shares as financial liabilities.
Liquidation Event is defined as (a) a liquidation, winding up or dissolution of theCompany; (b) a merger, consolidation, acquisition or sale or other transaction or series
related transactions of the Company where the shareholders do not retain control ofand a majority of the voting power in the surviving corporation; (c) a Trade Sale; or (d)an exclusive licensing of all or substantially all Intellectual Property Rights belonging
to the Group.

(d)During the six-month period ended 30 June 2023, the redemption rights of all series ofpreference shares have been extended to 31 December 2025.

Conversion rights(a)Each preference share is convertible, at the option of the holder, at any time after thedate of issuance of such preference shares (other than Series AA Share, whichcontains only automatic conversion term subject to point (c) below), according to aconversion ratio, subject to adjustments for dilution, including but not limited to stock
splits, stock dividends and capitalisation and certain other events. Each preference
share is convertible into a number of ordinary shares determined by dividing theapplicable original issuance price by the conversion price.

(b)

The conversion ratio of each Series of preference shares were adjusted upon theissuance of the latest preference share.

(c)Each preference share shall automatically be converted into ordinary shares, at thethen applicable preference share conversion price, upon closing of a qualified initialpublic offering.

B-48

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

20.

Financial liabilities at fair value through profit or loss (cont’d)Preference shares (cont’d)
Voting rights(a)Each preference share (other than Series AA Shares) shall have the same voting rights
as an ordinary share and shall carry one vote per preference share and shall be entitledto vote together with the ordinary shares on an “as-if converted” basis on all matterssubmitted to a vote of the shareholders of the Company. The holders of the preference
shares shall be entitled to receive notices of, and attend, speak and vote at, any
meetings of the shareholders of the Company.

(b)

The shareholders of Series AA Shares shall not have any voting rights and shall not
be entitled to speak or vote at, any meetings of the Shareholders, or act by writtenconsent.

Dividend rights(a)

The Series A to Series D preference shareholders rank pari passu with each other in
relation to claims and/or payment of dividends. The preference shareholders (otherthan Series AA Shares) shall be entitled to receive, in preference to any dividend on
the ordinary shares, non-cumulative dividends for each preference share at the rateequal to 8% of, as the case may be, the Series A preference share issue price, theSeries B preference share issue price, the Series C preference share issue price andthe Series D preference share issue price, for each respective preferred shareholder.
No dividend, whether in cash, in property, in shares in the Company or otherwise may
be declared or paid on any other class or series of shares unless and until the preferred
dividends are first paid in full.

(b)

The shareholders of Series AA Shares shall be entitled to receive, in preference to any
dividend on the ordinary shares, non-cumulative dividends if declared by the Board of
Directors. No dividend, whether in cash, in property, in shares in the Company orotherwise may be declared or paid on any other class or series of shares unless anduntil the preferred dividends are first paid in full.

B-49

20.

B-50

Long term loans (including current portion)
Lease liabilities
Financial liabilities at fair value through profit
or loss:– Preference shares– Warrants

Audited31 December 2022

Lease liabilities
Financial liabilities at fair value through profit
or loss:– Preference shares– Warrants

Unaudited
30 June 2023

(1,166,666)(3,018,333)
íí

154,948,006
295,000

Net
cash flow
US$

1 January2022
US$1,164,988
9,069,417

íí(791,382)

Net
cash flowUS$210,515,456
587,000

1,932,482

1 January
2023
US$

A reconciliation of liabilities arising from financing activities is as follows:

Financial liabilities at fair value through profit or loss (cont’d)Notes to financial statements
For the six-month period ended 30 June 2023

17LIVE Inc. and its subsidiaries

í
í

1,678
164,210

Accretionof interest
US$

í
í

51,684

Accretionof interest
US$

í
í

í
(3,827,087)

Net
disposalUS$íí

2,299,551

US$

Net addition

55,567,450
292,000

í
í

í
í

í
(455,725)

210,515,456
587,000

í
1,932,482

31 December
2022
US$

Non-cash changes
Fair value
Exchange
adjustment differences
US$US$

3,387,668
337,749,391
1,023,000(104,667)

30 June 2023
US$

í
í

127,233,935
436,000

í

Non-cash changes
Fair value
Exchange
adjustment differences
US$
US$

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

21.

Share-based payments
Employee share option plan
The employee share option plan commenced in March 2017, upon the closing of the shareswap among the Company, Paktor Pte. Ltd. (“Paktor”) and Ichi Nana Inc. Under a shareswap agreement, the Company became the holding company of Paktor and acquired 53.8%
interest of Ichi Nana Inc. Pursuant to the agreement, all share options and restricted share
units of Paktor and Ichi Nana Inc, vested or unvested, shall be assumed by the Company
and converted into share options and restricted share units of the Company, subject to thesame terms and conditions that are applicable to Paktor and Ichi Nana Inc’s options andrestricted share units (including expiration date, vesting conditions and exercise provisions).
The disposal of Paktor in March 2020 did not have any impact on the outstanding andexercisable (i.e. vested) options or restricted share units. To the extent any options or
restricted share units held by Paktor’s employees were vested at the time of the disposal,
such employees continued to hold such vested options and restricted share units.
The Company’s share options are subject to a 4-year service vesting condition with 25% of
the options becoming vested each year. Based on the terms of the award agreements withthe grantees, the awards granted under the employee share option plan can either be equitysettled or cash-settled, at the discretion of the Company. As of 31 December 2022 and 30
June 2023, the Company expects to settle the outstanding share options in shares. Since
the commencement of the employee share option plan, there has not been any settlementof share options in cash.
Movement of share options during the financial year
The following table shows the number (No.) and weighted average exercise prices (“WAEP”)
of, and movements in, share options during the financial period/year:
30 June 2023
(Unaudited)
No.
WAEP
US$

31 December 2022
(audited)
No.
WAEP
US$

Outstanding at 1 January and 30 June/
31 December

699,9970.85

699,997

0.85

Exercisable at 30 June/31 December

699,9970.85

699,997

0.85

No share options were vested, granted, exercised or forfeited during the six-month period
ended 30 June 2023 and the financial year ended 31 December 2022.
Fair value of share options granted
The fair value of share options granted is estimated at the date of the grant using a Binomial
option-pricing model, taking into account the terms and conditions upon which the options
were granted.

B-51

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

21.

Share-based payments (cont’d)Fair value of share options granted (cont’d)
The following table lists the inputs to the Binomial option pricing model for the six-month
period ended 30 June 2023 and the financial year ended 31 December 2022.
30 June2023(Unaudited)
Share price at grant date (US$)
Expected volatility (%)
Expected life of option (years)
Risk–free interest rate (% p.a.)0.416448
40.85

31 December
2022(Audited)
0.416448
40.85

Restricted share units
The Company’s restricted share units are subject to a 2 to 4 year vesting condition with
12.5% and 25% becoming vested after the first year and the remaining being vested evenly
over the remaining periods between 12 to 36 months. The restricted share units granted by
the Company can only be settled by shares.
In 2020, the Company granted restricted share units to its employees subject to certain Initial
Public Offering and corporate transaction conditions and becoming vested after fulfilling thecondition. The restricted share units granted by the Company can only be settled by shares.
As at 30 June 2023, no restricted share units were vested.
The Company’s restricted share units are subject to the achievement of performance
incentives, and vest based on the incentive for each year.
Movement of restricted share units during the financial period/year
The following table shows the movements in restricted share units during the financial
period/year:
2023
Number of units(Unaudited)

2022
Number of units(Audited)

Outstanding at 1 January- Granted- Forfeited

28,291,482
484,908(1,540,429)

40,901,923
3,067,378(15,677,819)

Outstanding at 30 June/31 December

27,235,961

28,291,482

Exercisable at 30 June/31 December

23,202,876

22,428,080

B-52

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

21.

Share-based payments (cont’d)Fair value of restricted share units granted
The fair value of restricted shares units was determined using the market approach, making
reference to the transaction price of most recent round of financing.
The following table lists the inputs for the fair value measurement of restricted share units forthe six-month period ended 30 June 2023 and the financial year ended 31 December 2022.
30 June2023(Unaudited)

31 December
2022(Audited)

1.26

1.26

Transaction price (US$)

Starting from 15 July 2015, the Board of Directors approved the issuance of restricted shares.
The relevant information is as follows:
Type of arrangement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement
Restricted shares award
agreement

Share price Number of Contract
Grant date on grant date shares/units periods
2015.07.15~
2016.12.16
2018.02.13

0.4597~0.47790.980

2018.04.01~
2019.10.01
2020.01.01~
2020.10.01
2020.10.01

0.70~
0.98099
0.47

Vesting
condition

4,550,611

4 years

Service period

13,942,929

4 years

Service period

15,755,122

2-4 years

Service period

11,523,840

4 years

Service period

0.47

8,626,368

Indefinite

2020.10.01

0.47

7,057,937

4 years2021.01.01~
2021.12.13
2022.01.01~
2022.12.1
2023.01.01~
2023.06.30

0.56

3,155,856

4 years

IPO/Corporatetransaction
Performance
incentive
Service period

0.29

3,067,378

4 years

Service period

0.43

484,908

4 years

Service period

The expenses incurred on share-based payment transactions for the six-month periods
ended 30 June 2023 and 30 June 2022 amounted to US$351,601 and US$470,486
respectively.
Subsequent to 30 June 2023, on 5 September 2023, the Company and one of its original
founders entered into an agreement to waive the Company’s further obligations under ashare repurchase agreement, as well as the original founder’s rights to the 699,997 shareoptions and 699,997 restricted share units held by him, for an aggregate consideration of
US$1,920,000. The effects of this transaction have not been adjusted for in these financial
statements.

B-53

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

22.

Share capital
Number ofshares (‘000)
At 1 January 2022, 31 December 2022, 1 January 2023
and 30 June 2023

37,924US$
3,792

The par value of the ordinary shares is US$0.0001 per share.
23.

Share premium
Share premium pertains to the difference between the par value of the ordinary shares andthe consideration paid for the repurchase of ordinary shares or the exercise of the restricted
share units.

24.

Other reserves
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Share-based payment reserve
Foreign currency translation reserve
Fair value reserve
Reorganisation reserve(a)

16,295,545(6,465,590)(214,500)(12,505,384)

15,943,944(5,255,241)(193,800)(12,505,384)(2,889,929)(2,010,481)

Share-based payment reserve
Share-based payment reserve represent the equity settled share options and restricted
shares units granted to employees. The reserve is made up of the cumulative value ofservices rendered by employees recorded over vesting period commencing from grant
date and is reduced by the expiry or exercise of the share options or restricted share
units.

(b)

Foreign currency translation reserve
The foreign currency translation reserve represents exchange difference arising fromthe translation of the financial statements of foreign operations whose functional
currencies are different from that of the Group’s presentation currency.

(c)

Fair value reserve
The change in credit risk of financial liabilities at fair value through profit or loss arerecorded in the fair value reserve.

B-54

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

24.

Other reserves (cont’d)(d)Reorganisation reserve
In March 2017, under a share swap agreement, all the existing shareholders of Paktor
exchanged their respective shares, including all of the ordinary and preference shares,for equivalent classes of shares of the Company on a 1 for 1.98 basis. The share swap
agreements were regarded as a reorganisation of entities. The difference between the
carrying amount of the Company and Paktor were recorded under reorganisation
reserve.

25.

Related party transactions
Key management compensation

Salaries and other short-term employee benefits
Share-based payment

26.

30 June2023
US$(Unaudited)

30 June2022
US$(Unaudited)

397,340
152,490557,658
160,685

549,830

718,253

Pledged assets
The Group’s assets pledged as collateral are as follows:Book value
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)

27.

Guarantee deposits

3,490,677

3,696,046

Restricted deposits

301,396284,977

3,792,073

3,981,023

PurposeRestricted deposits pursuant toJapanese Payment Services Act
Restricted deposits for credit cards

Segment information
For management’s purpose, the Group is organised into two operating business segments,
namely:(a)(b)

Live streaming; andOthers, which include the business from live-commerce and Wave App.

B-55

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

27.

Segment information (cont’d)Management monitors the operating results of its business units separately for the purposeof making decisions about resource allocation and performance assessment. Segment
performance is evaluated based on operating profit or loss which in certain respects, as
explained in the table below, is measured differently from operating profit or loss in the
consolidated financial statements.
30 June 2023
(Unaudited)

Revenue from external customers

Livestreaming
US$

OthersUS$147,582,779

3,401,749

Unallocated
US$
í

Total
US$
150,984,528

Results:
Revaluation loss on financial
liabilities
Depreciation and amortisation
Finance costs
Income tax credit/(expense)(1,063,728)(43,031)
841,342(23,020)
ííProfit/(loss) before income tax

20,520,408

153,321 (136,008,929) (115,335,200)

Assets:Additions to non-current assets
Segment assets

3,539,956
43,364,787

2,722
4,404,012

9,447
51,556,227

3,552,125
99,325,026

Segment liabilities

52,026,243

1,811,084

347,810,699

401,648,026

í (127,649,235) (127,649,235)

í

(1,300,861)(10,732)(3,750,905)(2,387,609)(53,763)(2,909,563)

30 June 2022
(Unaudited)Live
streaming
US$

OthersUS$

197,464,291

2,957,124

í

200,421,415

Results:
Revaluation loss on financial
liabilities
Depreciation and amortisation
Finance costs
Income tax expenseí
(1,415,825)(100,702)(874,221)í
(8,247)íí

(38,013,667)(1,319,735)(8,965)(7,268,564)(38,013,667)(2,743,806)(109,667)(8,142,785)

Profit/(loss) before income tax

17,532,259(554,545)(50,809,076)(33,831,362)

Revenue from external customers

B-56

Unallocated
US$

Total
US$

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

27.

Segment information (cont’d)
31 December 2022
(Audited)Live
streaming
US$

OthersUS$

Unallocated
US$

Total
US$

Assets:Additions to non-current assets
Segment assets

1,212,201
52,671,386

23,716
3,933,990

1,150,162
46,824,125

2,386,079
103,429,501

Segment liabilities

57,142,617

1,637,230

227,848,443

286,628,290

The Group’s revenue and gross profit in local currency for Japan and Taiwan are as follows:
30 June 2023

(Unaudited)
JPY
TWD

In local currency
Revenue
Gross profit

13,981,106,407
7,022,141,925

30 June 2022

(Unaudited)
TWD

JPY

1,167,412,843 17,183,197,540
259,001,800 6,652,079,890

1,288,420,371
226,392,646

Reconciliations
Segment assets are reconciled to total assets as follows:
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Segment assets for reportable segments
Other segment assets

43,364,787
4,404,012

52,671,386
3,933,990

Total segment assets

47,768,799

56,605,376

Unallocated:
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Cash and cash equivalents
Trade and other receivables
Prepaid operating expenses
Other current assets
Others136,097591,855
25,108,551
1,733,081
21,740,360
745,183
461,745656,242
383,113152,173
857,940
26,231,087
1,530,606
14,705,722
816,714533,337
1,577,075
419,471

Total assets

99,325,026

103,429,501

B-57

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

27.

Segment information (cont’d)Reconciliations (cont’d)
The unallocated intangible assets mainly consist of goodwill, which is not allocated to any
reportable segment, in view that the carrying value of goodwill arose from the acquisition of
17LIVE Japan, which is principally engaged in activities across the Group’s segments.
The unallocated trade and other receivables mainly consist of receivable from the issuanceof preference shares which is not allocated to any segments.
Segment liabilities are reconciled to total liabilities as follows:
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Segment liabilities for reportable segments
Other segment liabilities

52,026,243
1,811,084

57,142,617
1,637,230

Total segment liabilities

53,837,327

58,779,847

Unallocated:
Trade and other payables
Income tax payable
Financial liabilities at fair value through profit or loss
Provisions
Other current liabilities
Deferred tax liabilities
Lease liabilities

4,383,976
3,349,033
338,772,391
319,057
43,001
329,955
613,286

9,166,104
5,623,923
211,102,455
341,485
163,541
592,555
858,380

Total liabilities

401,648,026

286,628,290

Geographical information

Japan
US$
Revenue
Gross profit
Non-current assets

103,851,658
52,160,470
936,106

B-58

30 June 2023
(Unaudited)
TaiwanOthersUS$US$
38,216,427
8,478,683
3,525,007

Total
US$

8,916,443 150,984,528
2,419,759 63,058,912
25,319,699 29,780,812

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

27.

Segment information (cont’d)Geographical information (cont’d)

Japan
US$
Revenue
Gross profit

140,197,709
54,274,320

Non-current assets

30 June 2022
(Unaudited)
TaiwanOthersUS$US$44,888,566
7,887,520

Total
US$

15,335,140 200,421,415
3,320,120 65,481,960

Japan
US$

31 December 2022
(Audited)
TaiwanOthersUS$US$1,258,984

590,210

27,337,988

Total
US$
29,187,182

Non-current assets information presented above consist of property, plant and equipment,right-of-use assets and intangible assets as presented in the consolidated balance sheet.
28.

Fair value of assets and liabilities(a)

Fair value hierarchy
The Group categorises fair value measurements using a fair value hierarchy that isdependent on the valuation inputs used as follows:--

Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date. A market isregarded as active where a market in which transactions for the asset or liability
take place with sufficient frequency and volume to provide pricing information on
an ongoing basis.
Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. Regarding the convertible
debentures payable and preference shares liabilities issued by the Group
without active market is included in Level 3.

Fair value measurements that use inputs of different hierarchy levels are categorised
in its entirety in the same level of the fair value hierarchy as the lowest level input thatis significant to the entire measurement.

B-59

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

28.

Fair value of assets and liabilities (cont’d)(b)Assets and liabilities measured at fair value
The following table shows an analysis of each class of assets and liabilities measured
at fair value at the reporting date:

Level 1US$

30 June 2023
(Unaudited)
Level 2
Level 3
US$
US$

Total
US$

Liabilities
Recurring fair value
measurements
Financial assets measured at fairvalue through profit or loss
Warrants
Preference sharesííí
1,023,000
1,023,000
í 337,749,391 337,749,391

Total

í

í 338,772,391 338,772,391

Level 1US$

31 December 2022
(Audited)
Level 2
Level 3
US$
US$

Total
US$

Liabilities
Recurring fair value
measurements
Financial assets measured at fairvalue through profit or loss
Warrants
Preference sharesííí
587,000
587,000
í 210,515,456 210,515,456

Total

í

í 211,102,456 211,102,456

There was no transfer between Level 1 and Level 2 for the six-month period ended 30
June 2023 and for the financial year ended 31 December 2022.
(c)

Level 3 fair value measurements(i)

Information about significant unobservable inputs used in Level 3 fair value
measurements
The fair values of warrants are determined using the Black–Scholes pricing
model where the significant unobservable input is expected volatility. An
increase in the expected volatility used in isolation would result in an increase in
the fair value.
The fair value of convertible and redeemable preference shares was determinedusing the market approach and taking into consideration factors such as market
volatility, successful exit and liquidation transaction.

B-60

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

28.

Fair value of assets and liabilities (cont’d)(c)Level 3 fair value measurements (cont’d)(i)Information about significant unobservable inputs used in Level 3 fair value
measurements (cont’d)
The following table shows the information about fair value measurements using
unobservable inputs (Level 3):30 June2023
Range(Unaudited)
Preference shares:– Risk-free rate
– Volatility

5.5%
69.0%

Warrants:– Risk-free rate
– Volatility

31 December
2022
Range
(Audited)
4.3%
76.0%

4.8% to 5.5%
4.2% to 4.8%
46.1% to 75.0% 68.0% to 89.4%

The following table shows the impact on the Level 3 fair value measurement ofliabilities that are sensitive to changes in unobservable inputs that reflectreasonably possible alternative assumptions. The positive and negative effects
are approximately the same.

Preference shares
Preference shares
Warrant
Warrant

Preference shares
Preference shares
Warrant
Warrant

Input

ChangeRisk–free rate
Volatility
Risk–free rate
Volatility

±1%
±1%
±1%
±1%

Input

ChangeRisk–free rate
Volatility
Risk–free rate
Volatility

±1%
±1%
±1%
±1%

B-61

30 June 2023
Recognised in profit or loss
Favourable Unfavourable
changechangeUS$
US$(Unaudited) (Unaudited)
112,000
26,6177,000
6,000(108,631)(37,761)(10,000)(7,000)31 December 2022
Recognised in profit or loss
Favourable Unfavourable
changechangeUS$
US$(Audited)(Audited)
163,545
116,097
8,000
7,000

(159,114)(120,601)(8,000)(8,000)APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

28.

Fair value of assets and liabilities (cont’d)(d)Level 3 fair value measurements (cont’d)(ii)

Movements in Level 3 liabilities measured at fair value
The following table presents the reconciliation for all liabilities measured at fairvalue based on significant unobservable inputs (Level 3):
Financial liabilities at fairvalue through profit or loss
2023
2022
US$
US$
(Unaudited)(Audited)(iii)

At 1 January
Revaluation loss on financial liabilities
Change in credit risks through othercomprehensive income

211,102,456
127,649,235

155,243,006
55,860,150

20,700(700)

At 30 June/31 December

338,772,391

211,102,456

Valuation policies and procedures
For all significant financial reporting valuations using valuation models andsignificant unobservable inputs, it is the Group’s policy to engage externalvaluation experts who possess the relevant credentials and knowledge on thesubject of valuation, valuation methodologies and IFRS 13 fair value
measurement guidance to perform the valuation.
For valuations performed by external valuation experts, the appropriateness ofthe valuation methodologies and assumptions adopted are reviewed along withthe appropriateness and reliability of the inputs (including those developed
internally by the Group) used in the valuations.
In selecting the appropriate valuation models and inputs to be adopted for eachvaluation that uses significant non–observable inputs, external valuation experts
are requested to calibrate the valuation models and inputs to actual market
transactions (which may include transactions entered into by the Group with third
parties as appropriate) that are relevant to the valuation if such information isreasonably available.
Significant changes in fair value measurements from period to period are
evaluated for reasonableness. Key drivers of the changes are identified andassessed for reasonableness against relevant information from independentsources, or internal sources if necessary and appropriate.

(c)

Assets and liabilities not measured at fair value
Trade and other receivables, cash and cash equivalents, other current assets, tradeand other payables
The carrying amounts of these balances approximate their fair values due to the shortterm nature of these balances.

B-62

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

29.

Financial risk management objectives and policies
The Group is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include credit risk, liquidity risk and foreign currency risk.
The board of directors reviews and agrees on policies and procedures for the managementof these risks, which are executed by the management team. It is, and has been, throughout
the current and previous financial year, the Group’s policy that no trading in derivatives for
speculative purposes shall be undertaken.
The following sections provide details regarding the Group’s exposure to the abovementioned financial risks and the objectives, policies and processes for the management ofthese risks.
There has been no change to the Group’s exposure to these financial risks or the manner inwhich it manages and measures the risks.
(a)Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual
obligations resulting in a loss to the Group. The Group’s exposure to credit risk arises
primarily from trade and other receivables. For other financial assets, the Group
minimises credit risk by dealing exclusively with high credit rating counterparties.
The Group considers the probability of default upon initial recognition of asset andwhether there has been a significant increase in credit risk on an ongoing basis
throughout each reporting period.
The Group has determined the default event on a financial asset to be when internal
and/or external information indicates that the financial asset is unlikely to be received,
which could include default of contractual payments due for more than 180 days or
there is significant difficulty of the counterparty.
To assess whether there is a significant increase in credit risk, the Group compares
the risk of a default occurring on the asset as at reporting date with the risk of default
as at the date of initial recognition. The Group considers available reasonable andsupportive forward-looking information which includes the following indicators:--

External credit rating
Actual or expected significant adverse changes in business, financial or
economic conditions that are expected to cause a significant change to thedebtor’s ability to meet its obligations
Actual or expected significant changes in the operating results of the debtor
Significant increases in credit risk on other financial instruments of the samedebtorSignificant changes in the expected performance and behaviour of the debtor,
including changes in the payment status of debtor and changes in the operating
results of the debtor.

B-63

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

29.

Financial risk management objectives and policies (cont’d)(a)Credit risk (cont’d)
The Group determined that its financial assets are credit–impaired when:-

There is significant difficulty of the issuer or the debtor
A breach of contract, such as a default or past due event
It is becoming probable that the debtor will enter bankruptcy or other financial
reorganisation
There is a disappearance of an active market for that financial asset because offinancial difficulty

Financial assets are written off when there is no reasonable expectation of recovery,such as a debtor failing to engage in a repayment plan with the Group. Where loans
and receivables have been written off, the Group continues to engage enforcement
activity to attempt to recover the receivable due. Where recoveries are made, these
are recognised in profit or loss.
Trade receivables
The Group provides for lifetime expected credit losses for all trade receivables using aprovision matrix, estimated based on historical credit loss experience based on thepast due status of the debtors, adjusted as appropriate to reflect current conditions andestimates of future economic conditions. Accordingly, the credit risk profile of tradereceivables is presented based on their past due status in terms of the provision matrix.
Information regarding loss allowance movement and credit risk exposure on tradereceivables is disclosed in Note 18.
Excessive risk concentration
There is no significant concentration of credit risk relating to the Group’s tradereceivables.
Exposure to credit risk
At the end of the reporting period, the Group’s maximum exposure to credit risk isrepresented by the carrying amount of financial assets recognised in the consolidatedbalance sheets.
Other receivables
The Group assessed the latest performance and financial position of thecounterparties, adjusted for the future outlook of the industry in which thecounterparties operate in, and concluded that there has been no significant increasein the credit risk since the initial recognition of the financial assets. Accordingly, theGroup measured the impairment loss allowance using 12–month ECL and determinedthat the ECL is insignificant.

B-64

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

29.

Financial risk management objectives and policies (cont’d)(b)Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial
obligations due to shortage of funds. The Group’s exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The
Group manages and maintains adequate cash and cash equivalents to finance theGroup’s operations.
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group’s financial liabilities atthe end of the reporting period based on contractual undiscounted repayment
obligations.

Less than
1 yearUS$

30 June 2023
(Unaudited)
1 to 33 to 5
years
years
US$
US$

Total
US$

Financial liabilities
Trade and other payables
Lease liabilities
Preference shares
Warrants

44,178,744
í
1,679,843
1,799,197
í 295,230,828
1,023,000
íí 44,178,744
í
3,479,040
í 295,230,828
í
1,023,000

Total net undiscounted financial
liabilities

46,881,587 297,030,025

í 343,911,612

Less than
1 yearUS$

31 December 2022
(Audited)
1 to 33 to 5
years
years
US$
US$

Total
US$

Financial liabilities
Trade and other payables
Lease liabilities
Preference shares
Warrants

50,800,817
971,692
243,566,268
587,000í
1,024,362
ííí 50,800,817
7,072
2,003,126
í 243,566,268
í587,000

Total net undiscounted financial
liabilities

295,925,777

1,024,362

7,072 296,957,211

B-65

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

29.

Financial risk management objectives and policies (cont’d)(c)Foreign exchange risk
The Group’s foreign exchange risk results mainly from cash flows from transactions
denominated in foreign currencies. At present, the Group does not have any formal
policy for hedging against currency risk.
The Group has transactional currency exposures arising from sales or purchases thatare denominated in a currency other than the functional currency of the Group,
primarily Hong Kong Dollar (“HKD”).
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s loss before tax to areasonably possible change in the HKD exchange rates against the respectivefunctional currencies of the Group entities, with all other variables held constant.
Change in
USD rate

USD/HKD

30.

+1%
-1%

Effect on loss before tax
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)(28,117)
28,685(76,773)
78,324

Financial instruments by category
At the reporting date, the aggregate carrying amounts of financial assets at amortised costand financial liabilities at amortised cost were as follows:
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Financial assets measured at amortised cost
Trade and other receivables
Cash and cash equivalents
Guarantee deposits

Financial liabilities measured at amortised cost
Trade and other payables

B-66

20,427,666
39,865,932
3,490,677

24,027,252
39,259,309
3,696,046

63,784,275

66,982,607

44,178,744

50,800,817

44,178,744

50,800,817

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

31.

Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability tocontinue as a going concern in order to provide returns for shareholders and to maintain an
optimal capital structure to reduce the cost of capital. In order to improve the Group’s capital
structure, the Group may issue new shares or sell assets to reduce debt rate. The Group
monitors capital on the basis of the debt ratio. This ratio is calculated as total liabilities divided
by total assets.
As at 30 June 2023 and 31 December 2022, the Group’s debt ratios are as follows:
30 June31 December
2023
2022
US$
US$
(Unaudited)(Audited)
Total assets
Total liabilities

99,325,026
401,648,026

Debt ratio

32.

103,429,501
286,628,290

4.04

2.77

Investments in subsidiaries
The Group has the following investments in subsidiaries as at 30 June 2023 and 31
December 2022:
Ownership (%)
Name of subsidiary

Country ofincorporation

Ichi Nana Inc.

Principal activities

British Virgin Live streaming
Islands
17LIVE Japan Inc.
Japan
Live streaming
17 Media SG Pte. Ltd.
Singapore
Live streaming
Next Entertainment Global Cayman Islands Live streaming
Holding
Together Production LLC*
TaiwanMovie production andcopyright holder
Together Interactive
TaiwanEntertainment agent
Entertainment Limited*
Together Interactive Media
TaiwanEntertainment agent
Limited*Together Universal
TaiwanEntertainment agent
Entertainment Limited*
Together International
TaiwanEntertainment agent
Entertainment Limited*
LIVIT Business Ltd.*
TaiwanEntertainment agent
HandsUp Inc.
TaiwanOnline retailing
Wave Inc.
TaiwanLive streaming
Next Entertainment Inc.
TaiwanLive streaming andgaming17LIVE Services Inc.
TaiwanTechnical services
17LIVE (SEA) Pte. Ltd.
Singapore
Live streaming
17LIVE Ltd.
Hong Kong Live streaming
Next Entertainment
Hong Kong Live streaming(Hong Kong) Limited

B-67

30.6.2023 31.12.2022

Note

100

100

–

100
–
100

100
100
100

–
(a)
–

Note

Note

–

Note

Note

–

Note

Note

–

Note

Note

–

Note

Note

–

Note
100
100
100

Note
100
100
100

–
–
–
–

100
100
100
100

100
100
100
100

–
–
–
–

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

32.

Investments in subsidiaries (cont’d)Subsidiaries included in the consolidated financial statements (cont’d):Ownership (%)
Name of subsidiary
17LIVE (USA) Corp.
Liontrek Entertainment
India Pvt. Ltd.
17LIVE (Taiwan) Limited
Machipopo Co., Ltd.
M17 (USA) LLC
MyMai Inc.*
Next Entertainment
LimitedEmpower Next Limited*
Next Entertainment
Science & Technology(Beijing) Co., Ltd
Beijing Future Quyu
Technology Co. Ltd.*
Shenzhen Juli Future
Network Technology
Co., Ltd*
Next Entertainment Inc.

Country ofincorporation

Principal activities

United States of Live streaming
America
India
Live streaming
TaiwanLive streaming
Japan
Entertainment agent
United States of Live streaming
America
TaiwanOnline retailing
British Virgin Live streaming
Islands
TaiwanE–sport team
People’s
Live streaming
Republic of China
People’s
Live streaming
Republic of China
People’s
Live streaming
Republic of China
TaiwanEntertainment agent

30.6.2023 31.12.2022

Note

100

100

–

100

100

–

100
100
100

100
100
100

–
–
–

Note
100

Note
100

–
–

Note
100

Note
100

–
–

–

Note

(b)

–

Note

(c)

100

100

–

Note:

As of 30 June 2023, these entities were held by other individual owners. The Group has
yet to complete the legal process to acquire the ownership interests of these entities due
to local regulation. The Group and the individual owners have entered into contractual
agreements giving the Group the power to direct the relevant activities and the ability touse its power to affect variable returns. The operating activities and the finance function
are also controlled by the Group. Management has assessed that the Group has control
over these entities and the Group has included the results of these entities in the
consolidated financial statements. As of 30 June 2023 and 31 December 2022, total
assets from these entities amounted to $337,287 and $355,752, representing 0.34% and0.34% of total consolidated assets. For the six-month period ended 30 June 2023 andfinancial year ended 31 December 2022, total comprehensive income from these entities
amounted to $(65,041) and $959,120, representing 0.05% and (1.74)% of total
comprehensive income.

(a)

The subsidiary was de-registered in January 2023 and had already completed theliquidation process.
The subsidiary was dissolved in April 2023 and had already completed the liquidation
process.
The subsidiary was dissolved in March 2023 and had already completed the liquidation
process.

(b)
(c)

B-68

APPENDIX B: INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE
TARGET GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
17LIVE Inc. and its subsidiaries
Notes to financial statements
For the six-month period ended 30 June 2023

33.

Events occurring after the reporting period
On 2 October 2023, Vertex Technology Acquisition Corporation Ltd (“VTAC”), a special
purpose acquisition company incorporated as a Cayman Islands exempted company withlimited liability and listed on the Mainboard of the Singapore Exchange Securities Trading
Limited, entered into a conditional sale and purchase agreement (the “SPA”) with, among
others, the Company (as the target) and 17LIVE Holding Limited (“17LIVE Holdco”) (as theseller). Pursuant to the SPA, VTAC will acquire the entire issued and paid-up share capitalof the Company from 17LIVE Holdco. The SPA contains customary representations,warranties and covenants by the parties thereto and the Completion (as defined in the SPA)
is subject to certain conditions as further described in the SPA.
In connection with but not conditional on the completion of the Proposed Acquisition of theGroup by VTAC, on 20 October 2023, the Company’s shareholders approved, by way of an
Extraordinary General Meeting, the conversion of the warrants and preference shares of theGroup, which aggregated to US$211,102,456, into equity. The conversion is expected to be
take place before the completion of the Proposed Acquisition.

34.

Authorisation of financial statements for issue
The consolidated financial statements for the six-month period ended 30 June 2023 wereauthorised for issue in accordance with a resolution of the directors on 9 November 2023.

B-69

This page has been intentionally left blank.

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

Index

Page

Independent Auditor's Report

C-2

Unaudited Pro Forma Consolidated Statements of Comprehensive Income

C-5

Unaudited Pro Forma Consolidated Balance Sheet

C-6

Unaudited Pro Forma Consolidated Statements of Cash Flows

C-8

Statement of Adjustments for the Unaudited Pro Forma Consolidated Statements of

C-10

Comprehensive Income
Statement of Adjustments for the Unaudited Pro Forma Consolidated Balance Sheet

C-14

Statement of Adjustments for the Unaudited Pro Forma Consolidated Statements of Cash

C-18

Flows
Notes to the Unaudited Pro Forma Consolidated Financial Information

C-1

C-24

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
INDEPENDENT AUDITOR'S REPORT ON THE UNAUDITED PRO FORMA CONSOLIDATEDFINANCIAL INFORMATION OF VERTEX TECHNOLOGY ACQUISITION CORPORATION LTD
AND ITS SUBSIDIARIES FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 AND THE
SIX-MONTH PERIOD ENDED 30 JUNE 2023
The Board of Directors
Vertex Technology Acquisition Corporation Ltd
250 North Bridge Road
#11-01 Raffles City Tower
Singapore 179101
Dear Sirs,
We have completed our assurance engagement to report on the compilation of pro forma financial
information of Vertex Technology Acquisition Corporation Ltd (the "Company") and 17LIVE Inc. (the"Target Company") and its subsidiaries (collectively, the "Target Group", and together with theCompany, the "Enlarged Group") by management in connection with the Company's proposed
acquisition of the Target Group (the "Proposed Acquisition").
The pro forma financial information consists of the pro forma consolidated balance sheets as at 31
December 2022 and 30 June 2023, the pro forma consolidated statements of comprehensive income
for the financial year ended 31 December 2022 and the six-month period ended 30 June 2023, thepro forma consolidated statements of cash flows for the financial year ended 31 December 2022 andthe six-month period ended 30 June 2023, and related notes as set out in pages C-5 to C-28 of the
Circular issued by the Company. The applicable criteria on the basis of which management hascompiled the pro forma financial information are described in Note 3.
The pro forma financial information has been compiled by management to illustrate the impact of theevents set out in Note 2 on the Enlarged Group's financial position as at 31 December 2022 and 30
June 2023 as if the events had taken place on 31 December 2022 and 30 June 2023, respectively;
and its financial performance and cash flows for the financial year ended 31 December 2022 and thesix-month period ended 30 June 2023 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 management from the following:(a)

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

Audited consolidated financial statements of the Target Group for the financial years ended 31
December 2020, 2021 and 2022, on which an audit report has been included within the
Circular;(c)Unaudited interim financial statements of the Company for the six-month period ended 30 June
2023, on which no review report has been published; and(d)Unaudited interim consolidated financial statements of the Target Group for the six-month
period ended 30 June 2023, on which a review report has been included within the Circular.

Management's Responsibility for the Pro Forma Financial Information
Management is responsible for compiling the pro forma financial information on the basis as
described in Note 3.

- C-2 -C-2

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
INDEPENDENT AUDITOR'S REPORT ON THE UNAUDITED PRO FORMA CONSOLIDATEDFINANCIAL INFORMATION OF VERTEX TECHNOLOGY ACQUISITION CORPORATION LTD
AND ITS SUBSIDIARIES FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 AND THE
SIX-MONTH PERIOD ENDED 30 JUNE 2023 (CONT'D)
Our Independence and Quality Control
We have complied with the independence and other ethical requirements of the Accounting andCorporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants andAccounting Entities, which is founded on fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional behaviour.
We apply Singapore Standard on Quality Control 1 and accordingly maintain a comprehensive
system of quality control including documented policies and procedures regarding compliance withethical requirements, professional standards and applicable legal and regulatory requirements.
Auditor's Responsibilities
Our responsibility is to express an opinion about whether the pro forma financial information has been
compiled, in all material respects, by management on the basis as described in Note 3.
We conducted our engagement in accordance with Singapore Standard on Assurance Engagements(SSAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial
Information Included in a Prospectus, issued by the Institute of Singapore Chartered Accountants.
This standard requires that the practitioner plan and perform procedures to obtain reasonableassurance about whether management has compiled, in all material respects, the pro forma financial
information on the basis as described in Note 3.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the pro forma financial information,
nor have we, in the course of this engagement, performed an audit or review of the financial
information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in a circular is solely to illustrate the impactof a significant event or transaction on unadjusted financial information of the entity as if the event
had occurred or the transaction had been undertaken at an earlier date selected for purposes of theillustration. Accordingly, we do not provide any assurance that the actual outcome of the event ortransaction on 1 January 2022 would have been as presented.
A reasonable assurance engagement to report on whether the pro forma financial information has
been compiled, in all material respects, on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used by management in the compilation of the
pro forma financial information provide a reasonable basis for presenting the significant effects
directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about
whether:(i)

The related pro forma adjustments give appropriate effect to those criteria; and(ii)

The pro forma financial information reflects the proper application of those adjustments to theunadjusted financial information.

The procedures selected depend on the practitioner's judgement, having regard to the practitioner's
understanding of the nature of the Enlarged Group, the event or transaction in respect of which the
pro forma financial information has been compiled, and other relevant engagement circumstances.

- C-3 -C-3

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
INDEPENDENT AUDITOR'S REPORT ON THE UNAUDITED PRO FORMA CONSOLIDATEDFINANCIAL INFORMATION OF VERTEX TECHNOLOGY ACQUISITION CORPORATION LTD
AND ITS SUBSIDIARIES FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 AND THE
SIX-MONTH PERIOD ENDED 30 JUNE 2023 (CONT'D)
Auditor's Responsibilities (cont'd)
The engagement also involves evaluating the overall presentation of the pro forma financial
information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
OpinionIn our opinion,
(e)

(f)

The unaudited pro forma consolidated financial information has been compiled:(i)in a manner consistent with the accounting policies adopted by the Enlarged Group,
which are in accordance with International Financial Reporting Standards;(ii)

on the basis of the applicable criteria stated in Note 3 to the pro forma consolidated
financial information; andeach material adjustment made to the information used in the preparation of the pro forma
financial information is appropriate for the purpose of preparing such unaudited pro forma
financial information.

Restriction on Distribution and Use
This report has been prepared solely for inclusion in the Circular of the Company to be issued inconnection with the Company's Proposed Acquisition of the Target Group.

Ernst & Young LLP
Public Accountants andChartered Accountants
Singapore
9 November 2023
Partner-in-charge: Sharon Peh- C-4 -C-4

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 AND THE SIX-MONTH PERIODENDED 30 JUNE 2023
(Amounts expressed in United States Dollars)
6 months
ended
30.6.2023
US$

Year ended
31.12.2022
US$

Operating revenue
Cost of revenue

150,984,528(87,925,616)

363,717,850(237,568,755)

Gross profit

63,058,912

126,149,095

Operating expenses
Selling expenses
General and administrative expenses
Research and development expenses(24,315,104)(12,963,225)(13,517,949)(64,435,048)(25,523,838)(27,312,262)

Total operating expenses(50,796,278)(117,271,148)

Operating income

12,262,634

8,877,947

Non-operating income and expenses
Other gains and losses- Revaluation gain on financial liabilities-Others

639,657
1,560,676

5,900,465(33,276,466)

2,200,333
3,018,183(27,376,001)
2,607,421

Total non-operating income and expenses

5,218,516(24,768,580)

Profit/(loss) before income tax
Income tax expense

17,481,150(3,140,295)(15,890,633)(8,409,904)

Profit/(loss) for the period/year attributable to owners of theCompany

14,340,855(24,300,537)

Other comprehensive income:Items that may be reclassified to profit or loss
Foreign currency translation(1,210,349)(3,951,456)

Other comprehensive income for the period/year, net of tax(1,210,349)(3,951,456)

Total comprehensive income for the period/year attributable toowners of the Company

13,130,506(28,251,993)

0.06(0.11)

Finance income, net

Basic and diluted earnings per share

The accompanying accounting policies and explanatory notes form an integral part of the unaudited
pro forma consolidated financial information.
- C-5 -C-5

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETSAS AT 31 DECEMBER 2022 AND 30 JUNE 2023
(Amounts expressed in United States Dollars)
30.6.2023
US$

31.12.2022
US$Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Guarantee deposits

1,186,719
3,405,201
25,188,892
2,302,375
3,490,677

795,789
1,848,265
26,543,128
1,537,813
3,696,046

Total non-current assets

35,573,864

34,421,041

Current assets
Prepaid operating expenses
Short-term investments
Other current assets
Trade and other receivables
Cash and cash equivalents

2,582,602
159,170,447
751,940
20,551,791
26,988,996

3,376,020
157,280,550
2,325,918
24,053,674
26,875,783

Total current assets

210,045,776

213,911,945

Total assets

245,619,640

248,332,986

Current liabilities
Trade and other payables
Contract liabilities
Financial liabilities at fair value through profit or loss
Income tax payable
Lease liabilities
Provisions
Other current liabilities

45,864,687
6,860,310
1,470,625
3,903,055
1,614,677
855,409407,506

59,443,818
7,273,934
2,118,236
5,518,326
920,219
893,360
106,744

Total current liabilities

60,976,269

76,274,637

Net current assets

149,069,507

137,637,308

Non-current liabilities
Deferred tax liabilities
Lease liabilities
Provisions

329,955
1,772,991
359,504

855,590
1,012,263
164,036

Total non-current liabilities

2,462,450

2,031,889

Total liabilities

63,438,719

78,306,526

ASSETSLIABILITIES- C-6 -C-6

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETSAS AT 31 DECEMBER 2022 AND 30 JUNE 2023 (CONT'D)(Amounts expressed in United States Dollars)
30.6.2023
US$

31.12.2022
US$

EquityShare capital
Share premium
Other reserves
Accumulated deficit

21,203,421
21,383,501
520,679,716
394,301,886(2,889,929)(2,010,481)(356,812,287) (243,648,446)

Total equity

182,180,921

170,026,460

Total liabilities and equity

245,619,640

248,332,986

The accompanying accounting policies and explanatory notes form an integral part of the unaudited
pro forma consolidated financial information.

- C-7 -C-7

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 AND THE SIX-MONTH PERIODENDED 30 JUNE 2023
(Amounts expressed in United States Dollars)
6 months
ended
30.6.2023
US$

Year ended
31.12.2022
US$

Operating activities
Profit/(loss) before income tax

17,481,150(15,890,633)

Adjustments for:
Depreciation expense
Amortisation expense
Loss on disposal of property, plant and equipment
Share-based payments
Revaluation gain on financial liabilities
Finance income
Finance costs
Gain on termination of leases
Professional fees in relation to the Proposed Acquisition
Listing expense in relation to the Proposed Acquisition

1,053,772
1,333,837
339,744351,601(639,657)(3,071,947)
53,763(3,942)––2,590,617
2,300,960
995,365
840,238(5,900,464)(2,779,370)
171,948(338,996)
14,486,261
22,560,644

Operating cash flows before changes in working capital

16,898,321

19,036,570

Changes in working capital
Trade and other receivables
Prepaid operating expenses
Other current assets
Trade and other payables
Other current liabilities
Contract liabilities
Provisions

3,501,883
793,446
1,573,978(13,576,038)
300,762(413,624)(37,951)

10,189,372
1,081,843
107,348(24,282,505)(94,276)(2,708,938)(881,374)

Cash flows from operations
Interest paid
Income tax paid

9,040,777–(5,383,534)

2,448,040(4,583)(14,008,601)

Net cash flows generated from/(used in) operating activities

3,657,243(11,565,144)

Investing activities
Interest received
Purchase of short-term investments
Cash deposited in escrow accountDecrease in financial assets at fair value through profit or loss
Purchase of property, plant and equipment
Purchase of intangible assets
Increase in guarantee deposits
Professional fees paid in relation to the Proposed Acquisition

3,165,311(2,987,162)(182,473)–(964,143)–
205,369–

1,547,736(155,978,429)(331,666)
108,813(438,061)(467,858)(50,897)(15,122,187)(763,098)(170,732,549)

Net cash flows used in investing activities- C-8 -C-8

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 AND THE SIX-MONTH PERIODENDED 30 JUNE 2023 (CONT'D)(Amounts expressed in United States Dollars)
6 months
ended
30.6.2023
US$

Year ended
31.12.2022
US$

Financing activities
Proceeds from issuance of Sponsor Promote shares
Proceeds from issuance of redeemable shares
Proceeds from issuance of Sponsor IPO shares
Payment of offering expenses relating to redeemable shares
Proceeds from issuance of private placement warrants
Repayments of principal portion of lease liabilities
Repayment of loans and borrowings
Interest paid

–
–
–
–
–
(739,698)–(51,684)

18,593
132,177,593
22,273,368(2,326,289)
5,939,565(2,854,123)(1,166,666)(164,210)

Net cash flows (used in)/generated from financing activities(791,382)

153,897,831

Net increase/(decrease) in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at beginning of financial period/year

2,102,763(1,840,205)
26,543,965(28,399,862)(4,146,867)
59,090,846

Cash and cash equivalents at end of financial period/year

26,806,523

26,544,117

The accompanying accounting policies and explanatory notes form an integral part of the unaudited
pro forma consolidated financial information.

- C-9 -C-9

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
(Amounts expressed in United States Dollars)

Unaudited
Financial
Statements of
the Company
30.6.2023
US$

Unaudited
Pro Forma
Consolidated
Statement ofComprehensive
Income30.6.2023
US$

Unaudited
Financial
Statements of
the Target
Pro FormaGroup
Adjustments(1)30.6.2023
US$
US$

Operating revenue
Cost of revenue––

150,984,528(87,925,616)––

150,984,528(87,925,616)

Gross profit–

63,058,912–

63,058,912–(24,315,104)–(24,315,104)(743,623)(12,219,602)–(12,963,225)–(13,517,949)–(13,517,949)

Total operating expenses(743,623)(50,052,655)–(50,796,278)

Total operating income andexpense(743,623)

13,006,257–

12,262,634

Non-operating income andexpenses
Other gains and losses- Revaluation (loss)/gain on
financial liabilities- Others

639,657
1,451,433(127,649,235)(638,459)

127,649,235(ii)
747,702 (i), (iii)639,657
1,560,676

Finance income/(costs), net

2,091,090
1,620,513(128,287,694)(53,763)

128,396,937
1,451,433

2,200,333
3,018,183

Total non-operating income andexpenses

3,711,603(128,341,457)

129,848,370

5,218,516

Profit/(loss) before income tax
Income tax expense

2,967,980(230,732)(115,335,200)(2,909,563)

129,848,370–

17,481,150(3,140,295)

Profit/(loss) for the period
attributable to owners of theCompany

2,737,248(118,244,763)

129,848,370

14,340,855

Operating expenses
Selling expenses
General and administrative
expenses
Research and development
expenses- C-10 -

C-10

(i)

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
(Amounts expressed in United States Dollars)

Unaudited
Financial
Statements of
the Company
30.6.2023
US$

Unaudited
Financial
Statements of
the Target
Pro FormaGroup
Adjustments(1)30.6.2023
US$
US$

Unaudited
Pro Forma
Consolidated
Statement ofComprehensive
Income30.6.2023
US$

Other comprehensive income:Items that may be reclassified to
profit or loss
Foreign currency translation–(1,210,349)–

Change in credit risk of financial
liabilities at fair value throughprofit or loss–

(20,700)

20,700 (ii)

Other comprehensive income forthe period, net of tax–(1,231,049)

20,700(1,210,349)

2,737,248(119,475,812)

129,869,070

13,130,506

Total comprehensive income
for the period attributable toowners of the Company
Basic and diluted earnings per
share

0.46

(3.12)(1,210,349)

–

0.06

Note to the Pro Forma Adjustments:(1)

The pro forma adjustments relate to:(i)
Reversal of interest expense on redeemable shares of the Company US$1,451,433 andreversal of modification gain on redeemable shares of the Company of US$1,451,433(ii) Reversal of the revaluation loss on warrants and preference shares of the Target Groupaggregating to US$127,649,235 and changes in credit risk of warrants and preference
shares of the Target Group of US$20,700(iii) Reversal of professional fees accrued and/or paid during the six-month period ended 30
June 2023 in relation to the Proposed Acquisition, which amounted to US$2,199,135,
and which are deemed to have been incurred on 1 January 2022

- C-11 -C-11

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
(Amounts expressed in United States Dollars)

AuditedFinancial
Statements of
the Company
31.12.2022
US$

AuditedFinancial
Statements of
the Target
Pro FormaGroup
Adjustments(2)31.12.2022
US$
US$

Unaudited
Pro Forma
Consolidated
Statement ofComprehensive
Income31.12.2022
US$

Operating revenue
Cost of revenue––

363,717,850(237,568,755)––

363,717,850(237,568,755)

Gross profit–

126,149,095–

126,149,095(124,218)(64,310,830)–(64,435,048)(1,121,826)(24,402,012)–(25,523,838)–(27,312,262)–(27,312,262)

Total operating expenses(1,246,044)(116,025,104)–(117,271,148)

Total operating income andexpense(1,246,044)

10,123,991–

8,877,947

Non-operating income andexpenses
Other gains and losses- Revaluation gain/(loss) on
financial liabilities- Others

5,900,465
725,321(55,860,150)
3,045,118

55,860,150 (iii)(37,046,905) (i), (iv)

5,900,465(33,276,466)

Finance income/(costs), net

6,625,786
159,823(52,815,032)(171,948)

18,813,245
2,619,546(27,376,001)
2,607,421

Total non-operating income andexpenses

6,785,609(52,986,980)

21,432,791(24,768,580)

Profit/(loss) before income tax
Income tax expense

5,539,565(256,062)(42,862,989)(8,153,842)

21,432,791–(15,890,633)(8,409,904)

Profit/(loss) for the year
attributable to owners of theCompany

5,283,503(51,016,831)

21,432,791(24,300,537)

Operating expenses
Selling expenses
General and administrative
expenses
Research and development
expenses- C-12 -

C-12

(ii)

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
(Amounts expressed in United States Dollars)

AuditedFinancial
Statements of
the Company
31.12.2022
US$

Unaudited
Pro Forma
Consolidated
Statement ofComprehensive
Income31.12.2022
US$

AuditedFinancial
Statements of
the Target
Pro FormaGroup
Adjustments(2)31.12.2022
US$
US$

Other comprehensive income:Items that may be reclassified to
profit or loss
Foreign currency translation–(3,951,456)–

Change in credit risk of financial
liabilities at fair value throughprofit or loss

–

700

(700)

Other comprehensive income forthe year, net of tax–(3,950,756)(700)(3,951,456)

Total comprehensive income forthe year attributable to ownersof the Company

5,283,503(54,967,587)

21,432,091(28,251,993)

Basic and diluted earnings per
share

1.21

(1.35)(3,951,456)

(iii)

–

(0.11)

Note to the Pro Forma Adjustments:(2)

The pro forma adjustments relate to:(i)
The effects of the reverse takeover accounting for the Proposed Acquisition, including
the issuance of Sponsor Promote shares, with a resultant listing expense of
US$22,560,644(ii) Reversal of interest expense on redeemable shares of the Company of US$2,619,546(iii) Reversal of the revaluation loss on warrants and preference shares of the Target Groupaggregating to US$55,860,150 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 Acquisition amounting to
US$15,122,187, of which US$14,486,261 has been recognised in profit or loss, andUS$635,926 has been offset against share premium- C-13 -C-13

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDBALANCE SHEETAS AT 30 JUNE 2023
(Amounts expressed in United States Dollars)
Unaudited
Pro Forma
Consolidated
Statement of
Financial
Position
30.6.2023
US$

Unaudited
Financial
Statements of
the Company
30.6.2023
US$

Unaudited
Financial
Statements of
the Target
Group
30.6.2023
US$

Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Guarantee deposits

–
–
–
–
–

1,186,719
3,405,201
25,188,892
2,302,375
3,490,677

–
–
–
–
–

1,186,719
3,405,201
25,188,892
2,302,375
3,490,677

Total non-current assets–

35,573,864–

35,573,864

Current assets
Prepaid operating expenses
Short-term investments
Other current assets
Trade and other receivables
Cash and cash equivalents

1,103
159,170,447––
1,807,477

2,581,499–
751,940
20,551,791
39,865,932––––(14,684,413)

2,582,602
159,170,447
751,940
20,551,791
26,988,996

Total current assets

160,979,027

63,751,162(14,684,413)

210,045,776

Total assets

160,979,027

99,325,026(14,684,413)

245,619,640

384,511–47,259,978
6,860,310(1,779,802)–(iv)

45,864,687
6,860,310

Pro Forma
Adjustments(3)US$

ASSETS(i), (iv)

LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Financial liabilities at fair value
through profit or loss
Financial liabilities at amortised
cost
Income tax payable
Lease liabilities
Provisions
Other current liabilities

1,470,625

1,023,000(1,023,000)(iii)

1,470,625

129,734,723
487,750––––
3,415,305
1,614,677
855,409407,506(129,734,723)
–
–
–
–

(ii)

–
3,903,055
1,614,677
855,409407,506

Total current liabilities

132,077,609

61,436,185(132,537,525)

60,976,269

Net current assets

28,901,418

2,314,977

117,853,112

149,069,507- C-14 -C-14

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDBALANCE SHEETAS AT 30 JUNE 2023 (CONT'D)(Amounts expressed in United States Dollars)
Unaudited
Pro Forma
Consolidated
Statement of
Financial
Position
30.6.2023
US$

Unaudited
Unaudited
Financial
Financial
Statements of toStatements of
the Target
Pro Forma
the Company
Group
Adjustments(3)30.6.2023
30.6.2023
US$
US$
US$
Non-current liabilities
Financial liabilities at fair value
through profit or loss
Deferred tax liabilities
Lease liabilities
Provisions

–
–
–
–

337,749,391
329,955
1,772,991
359,504(337,749,391)–––

Total non-current liabilities–

340,211,841(337,749,391)

2,462,450

132,077,609

401,648,026(470,286,916)

63,438,719

21,811,463

3,792

Other reserves
Accumulated deficit––
7,089,955

Total equity
Total liabilities and equity

Total liabilities
EquityShare capital

(iii)

–
329,955
1,772,991
359,504

25,409,440(2,889,929)(324,846,303)(i), (ii),(611,834) (iii), (iv)(i), (ii),495,270,276(iii)–(39,055,939) (i), (iv)

520,679,716(2,889,929)(356,812,287)

28,901,418(302,323,000)

455,602,503

182,180,921

160,979,027

99,325,026(14,684,413)

245,619,640

Share premium

21,203,421

Notes to the Pro Forma Adjustments:(3)

The pro forma adjustments relate to:(i)
The effects of the reverse takeover accounting for the Proposed Acquisition, including
the issuance of Sponsor Promote shares, with a resultant listing expense of
US$19,678,856(ii) Conversion of all of the redeemable shares of the Company of US$129,734,723 into
equity(iii) Conversion of the warrants and preference shares of the Target Group aggregating to
US$338,772,391 into equity(iv) Total estimated professional fees in relation to the Proposed Acquisition of
US$15,122,187, which are deemed to have been incurred and settled in cash.
US$14,486,261 has been recognised in profit or loss, and US$635,926 has been offset
against share premium.

- C-15 -C-15

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDBALANCE SHEETAS AT 31 DECEMBER 2022
(Amounts expressed in United States Dollars)
Unaudited
Pro Forma
Consolidated
Statement of
Financial
Position
31.12.2022
US$

AuditedFinancial
Statements of
the Company
31.12.2022
US$

AuditedFinancial
Statements of
the TargetGroup
31.12.2022
US$Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Guarantee deposits

–
–
–
–
–

795,789
1,848,265
26,543,128
1,537,813
3,696,046

–
–
–
–
–

795,789
1,848,265
26,543,128
1,537,813
3,696,046

Total non-current assets–

34,421,041–

34,421,041

Current assets
Prepaid operating expenses
Short-term investments
Other current assets
Trade and other receivables
Cash and cash equivalents

6,461
157,280,550––
2,720,068

3,369,559–
2,325,918
24,053,674
39,259,309––––(15,103,594)

3,376,020
157,280,550
2,325,918
24,053,674
26,875,783

Total current assets

160,007,079

69,008,460(15,103,594)

213,911,945

Total assets

160,007,079

103,429,501(15,103,594)

248,332,986

399,901–

59,043,917
7,273,934––

59,443,818
7,273,934

Pro Forma
Adjustments(4)US$

ASSETS(i), (iv)

LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Financial liabilities at fair value
through profit or loss
Financial liabilities at amortised
cost
Income tax payable
Lease liabilities
Provisions
Other current liabilities

2,118,236

211,102,456(211,102,456)(iii)

2,118,236

130,805,715
262,555––––
5,255,771
920,219
893,360
106,744(130,805,715)
–
–
–
–

(ii)

–
5,518,326
920,219
893,360
106,744

Total current liabilities

133,586,407

284,596,401(341,908,171)

76,274,637

Net current assets/(liabilities)

26,420,672(215,587,941)

326,804,577

137,637,308- C-16 -C-16

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDBALANCE SHEETAS AT 31 DECEMBER 2022 (CONT'D)(Amounts expressed in United States Dollars)
Unaudited
Pro Forma
Consolidated
Statement of
Financial
Position
31.12.2022
US$

AuditedFinancial
Statements of
the Company
31.12.2022
US$

AuditedFinancial
Statements of
the TargetGroup
31.12.2022
US$Non-current liabilities
Deferred tax liabilities
Lease liabilities
Provisions–––

855,590
1,012,263
164,036–––855,590
1,012,263
164,036

Total non-current liabilities–

2,031,889–

2,031,889

133,586,407

286,628,290(341,908,171)

78,306,526

21,991,522

3,792

Other reserves
Accumulated deficit––
4,429,150

Total equity
Total liabilities and equity

Total liabilities
EquityShare capital

Pro Forma
Adjustments(4)US$

25,409,440(2,010,481)(206,601,540)(i), (ii),(611,813) (iii), (iv)(i), (ii),368,892,446(iii)–(41,476,056) (i), (iv)394,301,886(2,010,481)(243,648,446)

26,420,672(183,198,789)

326,804,577

170,026,460

160,007,079

103,429,501(15,103,594)

248,332,986

Share premium

21,383,501

Notes to the Pro Forma Adjustments:(4)

The pro forma adjustments relate to:(i)
The effects of the reverse takeover accounting for the Proposed Acquisition, including
the issuance of Sponsor Promote shares, with a resultant listing expense of
US$22,560,644(ii) Conversion of all of the redeemable shares of the Company of US$130,805,715 into
equity(iii) Conversion of the warrants and preference shares of the Target Group aggregating to
US$211,102,456 into equity(iv) Total estimated professional fees in relation to the Proposed Acquisition amounting to
US$15,122,187 which are deemed to have been incurred and settled in cash.
US$14,486,261 has been recognised in profit or loss, and US$635,926 has been offset
against share premium.

- C-17 -C-17

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF CASH FLOWSFOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
(Amounts expressed in United States Dollars)
Unaudited
Unaudited
Financial
Financial
Statements ofStatements of
the Target
the Company
Group
30.6.2023
30.6.2023

Pro Forma
Adjustments(5)Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows
30.6.2023

US$

US$

US$

US$

2,967,980(115,335,200)

129,848,370––

1,053,772
1,333,837––

1,053,772
1,333,837––

339,744351,601––

339,744351,601(639,657)(3,071,947)
1,451,433–

127,649,235–
53,763(3,942)(127,649,235)–(1,451,433)(ii)(1,451,433)–

1,451,433(i)–664,236

1,534,899(2,199,135)

(iii)

–

Operating cash flows before changes
in working capital(79,388)

16,977,709–

16,898,321

Changes in working capital
Trade and other receivables
Prepaid operating expenses
Other current assets
Trade and other payables
Other current liabilities
Contract liabilities
Provisions

–
5,386
–
(257,200)–––

3,501,883
788,060
1,573,978(13,318,838)
300,762(413,624)(37,951)

–
–
–
–
–
–
–

3,501,883
793,446
1,573,978(13,576,038)
300,762(413,624)(37,951)

Cash flows (used in)/generated
from operations
Income tax paid

(331,202)–

9,371,979(5,383,534)––

9,040,777(5,383,534)

Net cash flows (used in)/generated
from operating activities(331,202)

3,988,445–

3,657,243

Operating activities
Profit/(loss) before income tax
Adjustments for:
Depreciation expense
Amortisation expense
Loss on disposal of property, plantand equipment
Share-based payments
Revaluation loss/(gain) on financial
liabilities
Finance income
Finance costs
Gain on termination of leases
Modification gain on redeemablesharesProfessional fees in relation to the
Proposed Acquisition- C-18 -C-18(i), (ii),
(iii)

(i)

17,481,150(639,657)(3,071,947)
53,763(3,942)APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF CASH FLOWSFOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023 (CONT'D)(Amounts expressed in United States Dollars)
Unaudited
Unaudited
Financial
Financial
Statements ofStatements of
the Target
the Company
Group
30.6.2023
30.6.2023

US$
Investing activities
Interest received
Purchase of short-term investments
Cash deposited in escrow account
Purchase of property, plant andequipment
Decrease/(increase) in guarantee
deposits
Professional fees paid in relation to
the Proposed AcquisitionUS$

3,165,311(2,987,162)(182,473)

–
–
–

–

(964,143)

Pro Forma
Adjustments(5)Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows
30.6.2023

US$

US$
–
–
–
–

3,165,311(2,987,162)(182,473)(964,143)––

205,369

205,369(419,333)–

419,333

Net cash flows used in investing
activities(423,657)(758,774)

419,333(763,098)

Financing activities
Repayments of principal portion oflease liabilities
Interest paid––

(739,698)(51,684)––(739,698)(51,684)

Net cash flows used in financing
activities–(791,382)–(791,382)

(iii)

–

Net (decrease)/increase in cash andcash equivalents
Net foreign exchange difference
Cash and cash equivalents at
beginning of financial period(754,859)(8,539)2,438,289(1,831,666)

419,333–

2,102,763(1,840,205)

2,388,402

39,259,309(15,103,746)

26,543,965

Cash and cash equivalents at endof financial period

1,625,004

39,865,932(14,684,413)

26,806,523- C-19 -C-19

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF CASH FLOWSFOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023 (CONT'D)
For the purpose of the unaudited pro forma consolidated statement of cash flows, cash and cash
equivalents comprise the following at the end of the reporting period:
Unaudited
Unaudited
Financial
Financial
Statements ofStatements of
the Target
the Company
Group
30.6.2023
30.6.2023
Cash and cash equivalents
Less: Cash balances held in escrowaccount
Cash and cash equivalents at endof financial period

Pro Forma
Adjustments(5)Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows
30.6.2023

US$

US$

US$

US$

1,807,477

39,865,932(14,684,413)–(182,473)–

1,625,004

39,865,932(iii)

26,988,996(182,473)(14,684,413)

26,806,523

Note to the Pro Forma Adjustments:(5)

The pro forma adjustments relate to:(i) Reversal of interest expense on redeemable shares of the Company US$1,451,433 andreversal of modification gain on redeemable shares of the Company of US$1,451,433(ii) Reversal of the revaluation loss on warrants and preference shares of the Target Groupaggregating to US$127,649,235 and changes in credit risk of warrants and preference
shares of the Target Group of US$20,700(iii) Reversal of professional fees accrued and/or paid during the six-month period ended 30
June 2023 in relation to the Proposed Acquisition, which amounted to US$2,199,135. Total
estimated professional fees in relation to the Proposed Acquisition amount to
US$15,122,187, which are deemed to have been incurred and settled in cash as of 1
January 2022.

- C-20 -C-20

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
(Amounts expressed in United States Dollars)
Audited
AuditedFinancial
Financial
Statements ofStatements of
the Target
the Company
Group
31.12.2022
31.12.2022
US$
US$

Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows
31.12.2022
US$

Pro Forma
Adjustments(6)US$

Operating activities
Profit/(loss) before income tax(i), (ii),(iii), (iv)

5,539,565(42,862,989)

21,432,791––

2,590,617
2,300,960––

2,590,617
2,300,960––

995,365
840,238––

995,365
840,238(5,900,464)(2,779,370)
2,619,546–

55,860,150–
171,948(338,996)(55,860,150)–(2,619,546)
–

(iii)

–

–

14,486,261(iv)

14,486,261––

22,560,644(i)

22,560,644

Operating cash flows before changes
in working capital(520,723)

19,557,293–

19,036,570

Changes in working capital
Trade and other receivables
Prepaid operating expenses
Other current assets
Trade and other payables
Other current liabilities
Contract liabilities
Provisions–(6,302)–(573,891)–––

10,189,372
1,088,145
107,348(23,708,614)(94,276)(2,708,938)(881,374)

–
–
–
–
–
–
–

10,189,372
1,081,843
107,348(24,282,505)(94,276)(2,708,938)(881,374)

Cash flows (used in)/generated
from operations
Interest paid
Income tax paid

(1,100,916)––

3,548,956(4,583)(14,008,601)––

2,448,040(4,583)(14,008,601)

Net cash flows used in operating
activities(1,100,916)(10,464,228)–(11,565,144)

Adjustments for:
Depreciation expense
Amortisation expense
Loss on disposal of property, plantand equipment
Share-based payments
Revaluation loss/(gain) on financial
liabilities
Finance income
Finance costs
Gain on termination of leases
Professional fees in relation to the
Proposed Acquisition
Listing expense in relation to the
Proposed Acquisition(ii)(15,890,633)(5,900,464)(2,779,370)
171,948(338,996)–- C-21 -C-21

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 (CONT'D)(Amounts expressed in United States Dollars)
Audited
AuditedFinancial
Financial
Statements ofStatements of
the Target
the Company
Group
31.12.2022
31.12.2022
US$US$
Investing activities
Interest received
Purchase of short-term investments
Cash deposited in escrow accountDecrease in financial assets at fairvalue through profit or loss
Purchase of property, plant andequipment
Purchase of intangible assets
Increase in guarantee deposits
Professional fees paid in relation to
the Proposed Acquisition
Net cash flows used in investing
activities
Financing activities
Proceeds from issuance of Sponsor
Promote shares
Proceeds from issuance ofRedeemable shares
Proceeds from issuance of Sponsor
IPO shares
Payment of offering expenses
relating to redeemable shares
Proceeds from issuance of private
placement warrants
Repayments of principal portion oflease liabilities
Repayment of loans and borrowings
Interest paid
Net cash flows generated
from/(used in) financing
activities
Net increase/(decrease) in cash andcash equivalents
Net foreign exchange difference
Cash and cash equivalents at
beginning of financial year
Cash and cash equivalents at endof financial year

Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows
31.12.2022
US$

Pro Forma
Adjustments(6)US$

1,547,736(155,978,429)(331,666)

–
–
–

–
–
–

1,547,736(155,978,429)(331,666)––

108,813––108,813––(438,061)(467,858)(50,897)

–
–

–

–

(15,122,187)(154,762,359)(848,003)(15,122,187)––

18,593

132,177,593––

132,177,593

22,273,368––

22,273,368(2,326,289)––(2,326,289)

5,939,565––

5,939,565–––(2,854,123)(1,166,666)(164,210)–––(2,854,123)(1,166,666)(164,210)

158,064,237(4,184,999)

18,593

153,897,831

2,200,962
187,440(15,497,230)(4,334,307)(15,103,594)–(28,399,862)(4,146,867)–

59,090,846–

59,090,846

2,388,402

39,259,309(15,103,594)

26,544,117- C-22 -C-22(438,061)(467,858)(50,897)(iv)(15,122,187)(170,732,549)(i)

18,593

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA CONSOLIDATEDSTATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 (CONT'D)
For the purpose of the unaudited pro forma consolidated statement of cash flows, cash and cash
equivalents comprise the following at the end of the reporting period:
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows
31.12.2022

Unaudited
Unaudited
Financial
Financial
Statements ofStatements of
the Target
the Company
Group
Pro Forma
31.12.2022
31.12.2022
Adjustments(6)Cash and cash equivalents
Less: Cash balances held in
escrow accountCash and cash equivalents at
end of financial year

US$

US$

US$

US$

2,720,068

39,259,309(15,103,594)(331,666)––(331,666)

2,388,402

39,259,309(15,103,594)

26,544,117(i), (iv)

26,875,783

Note to the Pro Forma Adjustments:(6)

The pro forma adjustments relate to:(i)
The effects of the reverse takeover accounting for the Proposed Acquisition, including
the issuance of Sponsor Promote shares, with a resultant listing expense of
US$22,560,644(ii) Conversion of all of the redeemable shares of the Company of US$130,805,715 into
equity(iii) Conversion of the warrants and preference shares of the Target Group aggregating to
US$211,102,456 into equity(iv) Total estimated professional fees in relation to the Proposed Acquisition amounting to
US$15,122,187, which are deemed to have been incurred and paid as of 1 January 2022.
US$14,486,261 has been recognised in profit or loss, and US$635,926 has been offset
against share premium.

- C-23 -C-23

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
1.

Corporate information
Vertex Technology Acquisition Corporation Ltd (the "Company") is incorporated in the
Cayman Islands. The address of the Company's registered office is PO Box 309, Ugland
House, Grand Cayman, KY1-1104, Cayman Islands. As of 31 December 2022 and 30 June
2023, the Company had not commenced any operations.
17LIVE Inc. (the "Target Company") was incorporated as a Cayman Islands exempted
company with limited liability on 28 February 2017 under the Companies Act of the Cayman
Islands, under the name of M17 Entertainment Limited. On 23 September 2020, theCompany changed its name to 17LIVE Inc..
The registered office of the Target Company is located at 4th Floor, Harbour Place, 103
South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. The
principal place of business of the Company is located at 2-chǀme-12-28 Kitaaoyama, Minato
City, Tǀkyǀ-to 107-006.
The Target Company and its subsidiaries (collectively, the "Target Group") are principally
engaged in operating live streaming platform. The principal activities of its subsidiaries aredisclosed in Note 35 to the audited consolidated financial statements of the Target Group for
the financial years ended 31 December 2020, 2021 and 2022 as included in Appendix A of
the Circular.

2.

Significant events
The unaudited pro forma consolidated financial information has been prepared for inclusionin the Circular to shareholders of the Company in connection with the Proposed Acquisitionof the Target Group. The enlarged group of companies comprising the Company and theTarget Group, following the completion of the Proposed Acquisition, is collectively known as
the Enlarged Group.
The unaudited pro forma consolidated financial information of the Enlarged Group, becauseof their nature, are not necessarily indicative of the financial position and of the financial
performance that would have been attained had the signi¿cant events actually occurredearlier. Save as disclosed in this report, management, for the purpose of preparing this setof unaudited pro forma consolidated financial information of the Enlarged Group, have notconsidered the effects of other events.
Save for the following significant events discussed below, the directors, as at the date of thisreport, are not aware of other significant events subsequent to 30 June 2023 that would havea significant effect on the Enlarged Group's financial statements.

- C-24 -C-24

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
2.

Significant events (cont'd)
The Proposed Acquisition
On 2 October 2023, the Company announced that it had entered into a conditional Share
Purchase Agreement with 17LIVE Holding Limited (the "Vendor"), 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") to acquire the entire issued share capital of theTarget Company for a purchase consideration of US$682,200,000, which shall be satisfiedby (a) the issue and allotment of 160,605,109 new ordinary shares in the capital of theCompany to the Vendor at S$5.00 per share, and (b) subject to the satisfaction of certain
financial targets for earnout, the issue and allotment of additional 24,408,000 new ordinary
shares in the capital of the Company to the earnout shareholders (the "Proposed
Acquisition"). The Proposed Acquisition is subject to the approval of shareholders of theCompany at an extraordinary general meeting of the Company.
An addendum to the Share Purchase Agreement was entered into on 26 October 2023 toamend the number of new ordinary shares to 160,162,651.
The Proposed Acquisition would result in a reverse takeover of the Company.
Directly attributable costs related to the Proposed Acquisition is estimated to amount to
US$15,122,187, of which US$14,486,261 has been recognised in profit or loss, andUS$635,926 has been offset against share premium.
In connection with but not conditional on the completion of the Proposed Acquisition, on 20
October 2023, the Target Company's shareholders approved, by way of an Extraordinary
General Meeting, the conversion of the warrants and preference shares of the Target Group,
which aggregated to US$338,772,391 and US$211,102,456 as of 30 June 2023 and 31
December 2022 respectively, into equity. The conversion is expected to be take place before
the completion of the Proposed Acquisition.

3.

Basis of preparation of the unaudited pro forma consolidated financial information(a)

The unaudited pro forma consolidated financial information of the Enlarged Grouppursuant to the Proposed Acquisition set out in this report is expressed in United States
Dollars ("USD" or "US$") except as otherwise indicated. The financial information has
been prepared for illustrative purposes only. It has been prepared based on certain
assumptions and after making certain adjustments to show what:(i)the unaudited pro forma consolidated statements of comprehensive income of
the Enlarged Group for the financial year ended 31 December 2022 and the sixmonth period ended 30 June 2023 would have been if the Enlarged Groupstructure pursuant to the Proposed Acquisition as described in Note 2 had beenin place since 1 January 2022;(ii)

the unaudited pro forma consolidated statements of financial position of theEnlarged Group as at 31 December 2022 and 30 June 2023 would have been if
the Enlarged Group structure pursuant to the Proposed Acquisition as describedin Note 2 had been in place on those dates; and- C-25 -C-25

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
3.

Basis of preparation of the unaudited pro forma consolidated financial information(cont'd)(a)(cont’d):(iii)

the unaudited pro forma consolidated statements of cash flows of the Enlarged
Group for the financial year ended 31 December 2022 and the six-month period
ended 30 June 2023 would have been if the Enlarged Group structure pursuant
to the Proposed Acquisition as described in Note 2 had been in place since 1
January 2022.
The objective of the unaudited pro forma consolidated financial information of
the Enlarged Group is to show what the historical financial information would
have been had the Enlarged Group structure pursuant to the Proposed
Acquisition existed since 1 January 2022. However, the unaudited pro forma
consolidated financial information of the Enlarged Group is not necessarily
indicative of the financial performance or related effects on the financial position
that would have been obtained had the Enlarged Group structure pursuant to
the Proposed Acquisition actually existed earlier.

(b)

In presenting the unaudited pro forma consolidated financial information of theEnlarged Group, the following key assumptions and adjustments were taken into
account:(i)

The Proposed Acquisition
The issuance of 160,162,651 new ordinary shares at S$5.00 per share inconnection with the Proposed Acquisition would result in the Vendor holding acontrolling interest in the enlarged share capital of the Company. In accordancewith IFRS 3 Business Combinations, the acquisition of the Target Company by
the Company is accounted for as a reverse acquisition wherein the Target
Company is deemed to be the accounting acquirer and the Company theaccounting acquiree.
The consideration transferred for the Proposed Acquisition is measured using
the quoted market price of the Company's shares on the date of acquisition,
multiplied by the 160,162,651 shares expected to be issued. The fair value pershare as of 31 December 2022 and 30 June 2023 is assumed to be S$4.81 pershare, based on the quoted market price of the Company's shares as of 2
October 2023, being the date of the Share Purchase Agreement, of S$4.81.
Directly attributable costs related to the Proposed Acquisition is assumed to be
US$15,122,187, of which US$14,486,261 has been recognised in profit or loss,
and US$635,926 has been offset against share premium.

(ii)

Conversion of redeemable shares of the Company
In connection with the Proposed Acquisition, the redeemable shares of theCompany is assumed to be fully converted into equity, and there are no
redeeming shareholders. Accordingly, the interest expense on the redeemableshares recognised during the financial period/year have been reversed.

- C-26 -C-26

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
3.

Basis of preparation of the unaudited pro forma consolidated financial information(cont'd)(b)(cont’d):(iii)

Conversion of warrants and preference shares of the Target Company
In connection with but not conditional on the completion of the Proposed
Acquisition, on 20 October 2023, the Target Company's shareholders approved,
by way of an Extraordinary General Meeting, the conversion of the warrants andpreference shares of the Target Group into equity. Accordingly, the revaluation
gains/losses on the warrants and preference shares recognised during thefinancial period/year have been reversed.

(iv)

Issuance of Sponsor Promote shares
In connection with the Proposed Acquisition, 5,096,735 Sponsor Promote sharesis expected to be issued for a nominal consideration of S$25,000 (equivalent to
US$18,593).

(c)
The unaudited pro forma consolidated financial information of the Enlarged Group isbased on the following:(i)the audited financial statements of the Company for the financial year ended 31
December 2022, which have been prepared in accordance with International
Financial Reporting Standards ("IFRS");(ii)

the unaudited interim financial statements of the Company for the six-month
period ended 30 June 2023, which have been prepared in accordance with
IFRS;

(iii)

the audited consolidated financial statements of the Target Group for thefinancial year ended 31 December 2022, which have been prepared inaccordance with IFRS; and(iv)

the unaudited interim consolidated financial statements of the Target Group forthe six-month period ended 30 June 2023, which have been prepared inaccordance with International Financial Reporting Standards ("IFRS").

The audited financial statements of the Company for the financial year ended 31
December 2022 were audited by KPMG LLP, Public Accountants and Chartered
Accountants, Singapore. The independent auditor's report of the aforementioned
audited financial statements were not subject to any qualification.
The audited consolidated financial statements of the Target Group for the financial
year ended 31 December 2022 were audited by Ernst & Young LLP, Public
Accountants and Chartered Accountants, Singapore. The independent auditor's reportof the aforementioned audited financial statements were not subject to any qualification.

- C-27 -C-27

APPENDIX C: UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE ENLARGED GROUP FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022 AND THE SIX-MONTH PERIOD ENDED 30 JUNE 2023
4.

Significant accounting policies
The unaudited pro forma consolidated financial information is prepared using the sameaccounting policies as the audited financial statements of the Company for the financial year
ended 31 December 2022, and the audited consolidated financial statements of the Target
Group for the financial year ended 31 December 2022 as disclosed in Note 2 to the audited
consolidated financial statements of the Target Group for the financial years ended 31
December 2020, 2021 and 2022 as included in Appendix A of the Circular.

- C-28 -C-28

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATIONTHE COMPANIES ACT (AS REVISED)OF THE CAYMAN ISLANDSCOMPANY LIMITED BY SHARESAMENDED AND RESTATEDMEMORANDUM AND ARTICLES OF ASSOCIATIONOF

17LIVE GROUP LIMITED(ADOPTED BY SPECIAL RESOLUTION DATED [ ] AND EFFECTIVE ON [ ])D-1

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATIONTHE COMPANIES ACT (AS REVISED)OF THE CAYMAN ISLANDSCOMPANY LIMITED BY SHARESAMENDED AND RESTATEDMEMORANDUM OF ASSOCIATIONOF
17LIVE GROUP LIMITED(ADOPTED BY SPECIAL RESOLUTION DATED [ ] AND EFFECTIVE ON [ ])1

The name of the Company is 17Live Group Limited.

2

The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place
within the Cayman Islands as the Directors may decide.

3

The objects for which the Company is established are unrestricted and the Company shall havefull power and authority to carry out any object not prohibited by the laws of the Cayman Islands.

4

The liability of each Member is limited to the amount unpaid on such Member's shares.

5

The share capital of the Company is SGD$50,000.00 divided into 500,000,000 ordinary shares ofa par value of SGD$0.0001 each.

6

The Company has power to register by way of continuation as a body corporate limited by shares
under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman
Islands.

7

Capitalised terms that are not defined in this Amended and Restated Memorandum of Association
bear the respective meanings given to them in the Amended and Restated Articles of Associationof the Company.

D-2

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATIONTHE COMPANIES ACT (AS REVISED)OF THE CAYMAN ISLANDSCOMPANY LIMITED BY SHARESAMENDED AND RESTATEDARTICLES OF ASSOCIATIONOF
17LIVE GROUP LIMITED(ADOPTED BY SPECIAL RESOLUTION DATED [ ] AND EFFECTIVE ON [ ])1Interpretation

1.1

In the Articles Table A in the First Schedule to the Statute does not apply and, unless there issomething in the subject or context inconsistent therewith:"Affiliate"

in respect of a person, means any other person
that, directly or indirectly, through one or moreintermediaries, controls, is controlled by, or isunder common control with, such person, and (a)in the case of a natural person, shall include,
without limitation, such person’s spouse, parents,
children, siblings, mother-in-law and father-in-law
and brothers and sisters-in-law, whether by blood,
marriage or adoption or anyone residing in such
person’s home, a trust for the benefit of any of theforegoing, a company, partnership or any natural
person or entity wholly or jointly owned by any of
the foregoing and (b) in the case of an entity, shall
include a partnership, a corporation or any natural
person or entity which directly, or indirectly throughone or more intermediaries, controls, is controlled
by, or is under common control with, such entity.

"Applicable Law"means, with respect to any person, all provisionsof laws, statutes, ordinances, rules, regulations,permits, certificates, judgments, decisions,

D-3

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

decrees or orders of any governmental authority
applicable to such person.
"Articles"

means these amended and restated articles ofassociation of the Company.

"Audit Committee"

means the audit committee of the board of
directors of the Company established pursuant to
the Articles, or any successor committee.

"Auditor"means the person for the time being performing
the duties of auditor of the Company (if any).

"business day"means any day other than a Saturday, a Sunday
or a legal holiday or a day on which banking
institutions or trust companies are authorised or
obligated by law to close in Singapore.

"Chairperson"

shall mean the Chairperson presiding at any
meeting of members or of the board of Directors.

"Communication
Facilities"

shall mean video, video-conferencing, internet or
online conferencing applications, telephone ortele-conferencing and/or any other videocommunication, internet or online conferencing
application or telecommunications facilities bymeans of which all Persons participating in a
meeting are capable of hearing and be heard byeach other.

"Company"means the above named company.

"Company’s Website"means the website of the Company and/or its webaddress or domain name (if any).

"Designated Stock
Exchange"means the Singapore Exchange Securities
Trading Limited on which the securities of theCompany are listed for trading (abbreviation:
SGX).

"Directors"means the directors for the time being of theCompany.

D-4

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION"Dividend"means any dividend (whether interim or final)
resolved to be paid on Shares pursuant to the
Articles.

"Electronic
Communication"means a communication transmitted (whether
from one person to another, from one device toanother, from a person to a device or from a device
to a person):(a)by means of a telecommunication system; or(b)other means while in an electronic form asotherwise decided and approved by the
Directors,

such that it can (where particular conditions aremet) be received in legible form or be made legible
following receipt in non-legible form.
"Electronic Record"

has the same meaning as in the Electronic
Transactions Act.

"Electronic
Transactions Act"means the Electronic Transactions Act (AsRevised) of the Cayman Islands.

"Equity-linked
Securities"

means any debt or equity securities that areconvertible, exercisable or exchangeable for
Shares, including but not limited to a private
placement of equity or debt.

"Independent Director"

means an independent director of the Company.

"Laws"

means the Statute and every other act of thelegislature of the Cayman Islands for the time
being in force applying to or affecting theCompany, its Memorandum and/or these Articles.

"Market Day"means a day on which the Designated Stock
Exchange is open for trading in securities.

"Member"

has the same meaning as in the Statute.

D-5

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION"Memorandum"means the amended and restated memorandumof association of the Company.

"Nominating
Committee"

means the nominating committee of the board of
directors of the Company established pursuant to
the Articles, or any successor committee.

"Officer"means a person appointed to hold an office in the
Company.

"Ordinary Resolution"means a resolution passed by a simple majority of
the Members as, being entitled to do so, vote inperson or, where proxies are allowed, by proxy ata general meeting, and includes a unanimous
written resolution. In computing the majority whena poll is demanded regard shall be had to thenumber of votes to which each Member is entitledby the Articles.

"Person"shall mean any natural person, firm, company,
joint venture, partnership, corporation, associationor other entity (whether or not having a separate
legal personality) or any of them as the context so
requires.

"Present"shall mean, in respect of any Person, such
Person's presence at a general meeting ofmembers, which may be satisfied by means ofsuch Person or, if a corporation or other nonnatural Person, its duly authorised representative(or, in the case of any member, a proxy which has
been validly appointed by such member inaccordance with these Articles), being:(a)physically present at the meeting; or(b)in the case of any meeting at which
Communication Facilities are permitted inaccordance with these Articles, including any
Virtual Meeting, connected by means of the use ofsuch Communication Facilities.
"Register of Members"means the register of Members maintained inaccordance with the Statute and includes (except

D-6

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

where otherwise stated) any branch or duplicate
register of Members.
"Registered Office"means the registered office for the time being of
the Company.

"relevant intermediary"

has the meaning ascribed to it in the Singapore
Companies Act.

"Remuneration
Committee"

means the remuneration committee of the board of
directors of the Company established pursuant to
the Articles, or any successor committee.

"S$" or "Singapore
Dollars"means the legal currency of Singapore.

"Seal"

means the common seal of the Company andincludes every duplicate seal.

"Share"means an ordinary share of par value
SGD$0.0001 in the share capital of the Company
and includes a fraction of a share.

"Singapore Companies
Act"means the Companies Act 1967 of Singapore.

"Singapore Securities
and Futures Act"means the Securities and Futures Act 2001 ofSingapore.

"Special Resolution"means a resolution that has been passed by amajority of at least three-quarters of such
Members as, being entitled to do so, vote in person
or, where proxies are allowed, by proxy at a
general meeting of which notice specifying theintention to propose the resolution as a special
resolution has been duly given, and includes aunanimous written resolution.

"Statute"

means the Companies Act (As Revised) of the
Cayman Islands.

D-7

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION"telecommunication
system"means any system used or intended to be used fortelecommunications.

"telecommunications"means a transmission, emission or reception ofsigns, signals, writing, images, sounds or
intelligence of any nature by wire, radio, optical orother electro-magnetic systems whether or not
such signs, signals, writing, images, sounds or
intelligence
have
been
subjected
torearrangement, computation or other processes
by any means in the course of their transmission,
emission or reception.

"Treasury Share"means a Share held in the name of the Company
as a treasury share in accordance with the Statute.

"Virtual Meeting"shall mean any general meeting of the members
at which the members (and any other permitted
participants of such meeting, including, without
limitation, the Chairperson of such meeting andany Directors) are permitted to attend andparticipate solely by means of Communication
Facilities.

1.2

In the Articles:(a)words importing the singular number include the plural number
and vice versa;(b)words importing the masculine gender include the feminine
gender;(c)words importing persons include corporations as well as anyother legal or natural person;(d)"written" and "in writing" include all modes of representing or
reproducing words in visible form, including in the form of an
Electronic Record;(e)"shall" shall be construed as imperative and "may" shall be
construed as permissive;

D-8

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION(f)references to provisions of any law or regulation shall be
construed as references to those provisions as amended,
modified, re-enacted or replaced;(g)any phrase introduced by the terms "including", "include", "inparticular" or any similar expression shall be construed as
illustrative and shall not limit the sense of the words preceding
those terms;(h)the term "and/or" is used herein to mean both "and" as well as"or." The use of "and/or" in certain contexts in no respects
qualifies or modifies the use of the terms "and" or "or" in others;(i)the term "or" shall not be interpreted to be exclusive and theterm "and" shall not be interpreted to require the conjunctive (ineach case, unless the context otherwise requires);(j)headings are inserted for reference only and shall be ignored inconstruing the Articles;(k)

any requirements as to delivery under the Articles include
delivery in the form of an Electronic Record;(l)where the Company is required to record any information in any
company records in writing, that requirement may be met byinformation in the form of an Electronic Record in accordancewith the Electronic Transactions Act;(m)

any requirements as to execution or signature under the Articles
including the execution of the Articles themselves can besatisfied in the form of an electronic signature as defined in theElectronic Transactions Act;(n)sections 8 and 19(3) of the Electronic Transactions Act shall not
apply;(o)the expressions “Depositor” and “Depository” shall have themeanings ascribed to them respectively in the Singapore
Securities and Futures Act;(p)

the term "clear days" in relation to the period of a notice meansthat period excluding the day when the notice is received or

D-9

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

deemed to be received and the day for which it is given or onwhich it is to take effect; and(q)

the term "holder" in relation to a Share means a person whosename is entered in the Register of Members as the holder ofsuch Share.

2

Commencement of Business

2.1

The business of the Company may be commenced as soon afterincorporation of the Company as the Directors shall see fit.

2.2

The Directors may pay, out of the capital or any other monies of theCompany, all expenses incurred in or about the formation andestablishment of the Company, including the expenses of registration.

3

Issue of Shares and other Securities

3.1

Subject to the provisions, if any, in the Memorandum (and to any
direction that may be given by the Company in general meeting) and,
where applicable, the rules and regulations of the Designated Stock
Exchange and/or any other competent regulatory authority or otherwise
under Applicable Law, and without prejudice to any rights attached toany existing Shares, the Directors may allot, issue, grant options overor otherwise dispose of Shares (including fractions of a Share) with orwithout preferred, deferred or other rights or restrictions, whether inregard to Dividends or other distributions, voting, return of capital orotherwise and to such persons, at such times and on such other terms
as they think proper, and may also (subject to the Statute, the Articles
and the rules and regulations of the Designated Stock Exchange and/or
any other competent regulatory authority or otherwise under ApplicableLaw) vary such rights.

3.2

Subject to the provisions, if any, in the Memorandum (and to any
direction that may be given by the Company in general meeting) and,
where applicable, the rules and regulations of the Designated Stock
Exchange and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may issue rights, options, warrants
or convertible securities or securities of similar nature conferring theright upon the holders thereof to subscribe for, purchase or receive anyclass of Shares or other securities in the Company on such terms as
the Directors may from time to time determine.

D-10

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

3.3

Subject to the provisions, if any, in the Memorandum (and to any
direction that may be given by the Company in general meeting) and,
where applicable, the rules and regulations of the Designated Stock
Exchange and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may issue units of securities in the
Company, which may be comprised of whole or fractional Shares,
rights, options, warrants or convertible securities or securities of similar
nature conferring the right upon the holders thereof to subscribe for,purchase or receive any class of Shares or other securities in the
Company, upon such terms as the Directors may from time to time
determine.

3.4

The Company shall not issue Shares to bearer.

3.5

Preference shares may be issued subject to such limitation thereof as
may be prescribed by the Designated Stock Exchange. The rights
attaching to shares of a class other than Shares, including preference
shares, shall be as determined by the Directors prior to issuance andmust be expressed but subject to such limitations in respect of suchclass of shares as may be prescribed by the Designated Stock
Exchange. The total number of issued preference shares shall not
exceed the total number of Shares issued at any time.

Provisionsand (b)

3.6

The holders of any preference shares shall have the same rights as theholders of Shares as regards:

Provision 1(d)(a)

the right to receive notices, reports, balance sheets and any
financial information provided to Members holding Shares,
including any notices of general meetings of the Company; and(b)

the right to attend and vote at any general meeting of theCompany including any general meeting convened for the
purpose of reducing the Company's capital or winding up or
sanctioning a sale of the undertaking of the Company or where
the proposition to be submitted to the meeting directly affects
their rights and privileges or on any proposition when thedividend on the preference shares is in arrear for more than six
months.

D-11

1(a)

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

3.7

The Company has power to issue preference shares ranking equally
with, or in priority to, preference shares already issued.

4

Register of Members

4.1

The Company shall maintain or cause to be maintained the Register ofMembers in accordance with the Statute.

4.2

The Directors may determine that the Company shall maintain one ormore branch registers of Members in accordance with the Statute. The
Directors may also determine which register of Members shallconstitute the principal register and which shall constitute the branchregister or registers, and to vary such determination from time to time.

4.3

The Directors may determine that a Depository may maintain a branchregister of Members in accordance with the Statute and the rules andregulations of the Designated Stock Exchange.

5

Closing Register of Members or Fixing Record Date

5.1

The Directors may fix in advance or arrears a date as the record date
for any such determination of Members entitled to notice of, or to voteat any meeting of the Members or any adjournment thereof, or for the
purpose of determining the Members entitled to receive payment of any
Dividend or other distribution, or in order to make a determination ofMembers for any other purpose.

5.2

If no record date is fixed for the determination of Members entitled to
notice of, or to vote at, a meeting of Members or Members entitled toreceive payment of a Dividend or other distribution, the date on whichnotice of the meeting is sent or the date on which the resolution of the
Directors resolving to pay such Dividend or other distribution is passed,
as the case may be, shall be the record date for such determination ofMembers. When a determination of Members entitled to vote at any
meeting of Members has been made as provided in this Article, suchdetermination shall apply to any adjournment thereof.

D-12

Provision 1(c)

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

6

Certificates for Shares

6.1

Every person whose name is entered as a Member in the Register ofMembers shall be entitled to receive, within ten Market Days (or suchother period as may be approved by the Designated Stock Exchange)of the closing date of any application for Shares or, as the case may be,
the date of lodgement of a registrable transfer, one certificate for all
such person's shares of any one class or several certificates inreasonable denominations each for a part of the Shares so allotted ortransferred. Where such a Member transfers part only of the Sharescomprised in a certificate, the old certificate shall be cancelled and a
new certificate or certificates for the balance of such Shares issued inlieu thereof and such Member shall pay a maximum fee of S$2 for eachnew certificate or such other fee as the Directors may from time to time
determine having regard to any limitation in respect of such partial
transfer as may be prescribed by the Designated Stock Exchange.

6.2

Share certificates representing Shares, if any, shall be in such form as
the Directors may determine. Share certificates shall be signed by one
or more Directors or other person authorised by the Directors. The
Directors may authorise certificates to be issued with the authorised
signature(s) affixed by mechanical process. All certificates for Sharesshall be consecutively numbered or otherwise identified and shallspecify the Shares to which they relate. All certificates surrendered to
the Company for transfer shall be cancelled and, subject to the Articles,
no new certificate shall be issued until the former certificate
representing a like number of relevant Shares shall have beensurrendered and cancelled.

6.3

If any person whose name is entered in the Register of Members shallsurrender for cancellation a share certificate representing Shares heldby such person and request the Company to issue in lieu two or moreshare certificates representing such Shares in such proportions as such
person may specify, the Directors may, if they think fit, comply with such
request. Such person shall (unless such fee is waived by the Directors)
pay a maximum fee of S$2 for each share certificate issued in lieu of ashare certificate surrendered for cancellation or such other fee as the
Directors may from time to time determine having regard to any
limitation as may be prescribed by the Designated Stock Exchange.

D-13

Provision 2

Provision 2

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

6.4

The Company shall not be bound to register more than three persons
as the registered holders of a Share except in the case of executors or
administrators (or trustees) of the estate of a deceased Member.

6.5

The Company shall not be bound to issue more than one certificate for
Shares held jointly by more than one person and delivery of a certificate
to one joint holder shall be a sufficient delivery to all of them.

6.6

Subject to the provisions of the Applicable Law, if a share certificate isdefaced, worn out, lost, destroyed or stolen, it may be renewed on such
evidence being produced and a letter of indemnity (if required) being
given by the Member, transferee, person entitled, purchaser, member
firm or member company of the Designated Stock Exchange or on
behalf of its or their client or clients as the Directors of the Company
shall require, and (in the case of defacement or wearing out) upondelivery of the old certificate and in any case on payment of such sum
not exceeding S$2 as the Directors may from time to time require. In
the case of destruction, loss or theft, a Member or person entitled towhom such renewed certificate is given shall also bear the loss and pay
to the Company all expenses incidental to the investigations by theCompany of the evidence of such destruction or loss.

6.7

Every share certificate sent in accordance with the Articles will be sent
at the risk of the Member or other person entitled to the certificate. The
Company will not be responsible for any share certificate lost or delayedin the course of delivery.

6.8

Share certificates shall be issued within the relevant time limit asprescribed by the Statute, if applicable, or as the rules and regulationsof the Designated Stock Exchange and/or any other competentregulatory authority or otherwise under Applicable Law may from time
to time determine, whichever is shorter, after the allotment or, except in
the case of a Share transfer which the Company is for the time being
entitled to refuse to register and does not register, after lodgement of a
Share transfer with the Company.

D-14

Provision 4(d)Provisions
and 2

1(g)

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

7

Transfer of Shares

7.1

All transfers of the legal title in Shares may be effected by the registeredholders thereof by an instrument of transfer in writing in the form for thetime being approved by the Designated Stock Exchange or in any otherform acceptable to the Directors. The instrument of transfer of any
Share shall be signed by or on behalf of both the transferor and thetransferee and be witnessed, provided always that an instrument oftransfer in respect of which the transferee is the Depository or its
nominee (as the case may be) shall be effective although not signed orwitnessed by or on behalf of the Depository or its nominee (as the casemay be). The transferor shall remain the holder of the Shares concerned
until the name of the transferee is entered in the Register of Members
in respect thereof.

7.2

The Directors may in their sole discretion refuse to register any
instrument of transfer of Shares unless:(a)such fee not exceeding S$2 as the Directors may from time totime require, is paid to the Company in respect thereof; and(b)

if the Shares in question were issued in conjunction with rights,
options, warrants or units issued pursuant to the Articles onterms that one cannot be transferred without the other, evidence
satisfactory to the Directors of the like transfer of such right,
option, warrant or unit is provided to the Directors.

7.3

Save as set out in Article 7.2, there shall be no restriction on the transfer
of fully paid Shares except where required by the Applicable Law or therules and regulations of the Designated Stock Exchange.

8

Redemption, Repurchase and Surrender of Shares

8.1

Subject to the provisions of the Statute, and, where applicable, the rules
and regulations of the Designated Stock Exchange and/or any othercompetent regulatory authority or otherwise under Applicable Law, theCompany may issue shares that are to be redeemed or are liable to beredeemed at the option of the Member or the Company as the Directors
may determine prior to the issuance of such shares.

D-15

Provision 4(a)Provision 4(b)Provision 4(c)

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

8.2

Subject to the provisions of the Statute and Article 10.2, and, whereapplicable, the rules and regulations of the Designated Stock Exchange
and/or any other competent regulatory authority or otherwise under
Applicable Law, the Company may purchase its own shares (including
any redeemable shares) in such manner and on such other terms as
the Directors may agree with the relevant Member.

8.3

For the avoidance of doubt, subject to, where applicable, the rules andregulations of the Designated Stock Exchange and/or any othercompetent regulatory authority or otherwise under Applicable Law,redemptions, repurchases and surrenders of shares in thecircumstances described in this Article 8 shall not require further
approval of the Members (excluding any repurchase of preference
shares described in Article 10.2).

8.4

The Company may make a payment in respect of the redemption orpurchase of its own Shares in any manner permitted by the Statute,
including out of capital.

8.5

The Directors may accept the surrender for no consideration of any fully
paid Share.

9

Treasury Shares

9.1

The Directors may, prior to the purchase, redemption or surrender of
any Share, determine that such Share shall be held as a Treasury
Share.

9.2

The Directors may determine to cancel a Treasury Share or transfer a
Treasury Share on such terms as they think proper (including, without
limitation, for nil consideration).

9.3

The Company shall not exercise any right in respect of the Treasury
Shares save as prescribed by Articles 9.1 and 9.2 above, and the
Statute.

D-16

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

10

Variation of Rights of Shares

10.1

Subject to Article 3.1 and 10.2, if at any time the share capital of theCompany is divided into different classes of shares, all or any of therights attached to any class (save and except for preference shares(other than redeemable preference shares)) may, whether or not theCompany is being wound up, be varied without the consent of theholders of the issued shares of that class where such variation isconsidered by the Directors not to have a material adverse effect uponsuch rights. For the avoidance of doubt, the Directors reserve the right,
notwithstanding that any such variation may not have a material
adverse effect, to obtain consent from the holders of shares of therelevant class at a separate meeting of such class held for such
purpose. To any such meeting all the provisions of the Articles relating
to general meetings shall apply mutatis mutandis, except that thenecessary quorum shall be one person holding or representing by proxyat least one-third of the issued shares of the class and that any holderof shares of the class Present may demand a poll.

10.2

Notwithstanding Articles 8.2 and 10.1, subject to the provisions of the
Applicable Law, preference shares (other than redeemable preference
shares) may be repaid or repurchased and the special rights attached
to preference shares may be altered, varied or abrogated only with the
sanction of a Special Resolution passed at a separate class meeting of
the preference shareholders concerned (but not otherwise), provided
always that where the necessary majority for such a Special Resolution
is not obtained at such class meeting, the consent in writing if obtained
from the holders of three-quarters of the issued shares of the classconcerned within two calendar months of the date of such meeting shallbe as valid and effectual as a Special Resolution adopted at suchmeeting.

10.3

The rights conferred upon the holders of the shares of any class issued
with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed
to be varied by the creation or issue of further shares ranking pari passu
therewith or shares issued with preferred or other rights.

D-17

Provision 5

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

11

Commission on Sale of Shares
The Company may, in so far as the Statute permits, pay a commission
to any person in consideration of his subscribing or agreeing to
subscribe (whether absolutely or conditionally) or procuring or agreeing
to procure subscriptions (whether absolutely or conditionally) for any
Shares. Such commissions may be satisfied by the payment of cash
and/or the issue of fully or partly paid-up Shares. The Company may
also on any issue of Shares pay such brokerage as may be lawful.

12

Non Recognition of Trusts
The Company shall not be bound by or compelled to recognise in any
way (even when notified) any equitable, contingent, future or partial
interest in any Share, or (except only as is otherwise provided by the
Articles or the Statute) any other rights in respect of any Share otherthan an absolute right to the entirety thereof in the holder.

13

Lien on Shares

13.1

The Company shall have a first and paramount lien on every Share (notbeing a fully paid Share) and dividends from time to time declared in
respect of such Shares. Such lien shall be restricted to unpaid calls andinstalments upon the specific Shares in respect of which such monies
are due and unpaid, and to such amounts as the Company may becalled upon by law to pay in respect of the Shares of the Member ordeceased Member. The Directors may waive any lien which has arisen
and may resolve that any Share shall for some limited period be exempt
wholly or partially from the provisions of this regulation. The registrationof a transfer of any such Share shall operate as a waiver of theCompany's lien thereon.

13.2

The Company may sell, in such manner as the Directors think fit, any
Shares on which the Company has a lien, if a sum in respect of which
the lien exists is presently payable, and is not paid within fourteen clear
days after notice has been received or deemed to have been received
by the holder of the Shares, or to the person entitled to it inconsequence of the death or bankruptcy of the holder, demanding
payment and stating that if the notice is not complied with the Shares
may be sold. Any such Shares on which the Company has a lien or
whose call remain unpaid, and which are sold pursuant to this Article

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will be sold pursuant to procedure for the sale of forfeited Shares as
described in Article 15.
13.3

To give effect to any such sale the Directors may authorise any person
to execute an instrument of transfer of the Shares sold to, or inaccordance with the directions of, the purchaser. The purchaser or such
purchaser's nominee shall be registered as the holder of the Sharescomprised in any such transfer, and the purchaser shall not be boundto see to the application of the purchase money, nor shall such
purchaser's title to the Shares be affected by any irregularity or invalidity
in the sale or the exercise of the Company's power of sale under the
Articles.

13.4

The net proceeds of such sale after payment of the costs of such saleshall be applied in or towards payment or satisfaction of the debts or
liabilities (including unpaid calls and accrued interest and expenses)
and any residue shall be paid to the person entitled to the Shares at thetime of the sale or to such person's executors, administrators or
assigns, or as such person may direct.

14

Call on Shares

14.1

Subject to the terms of the allotment and issue of any Shares, theDirectors may make calls upon the Members in respect of any monies
unpaid on their Shares (whether in respect of par value or premium),and each Member shall (subject to receiving at least fourteen clear
days' notice specifying the time or times of payment) pay to theCompany at the time or times so specified the amount called on the
Shares. A call may be revoked or postponed, in whole or in part, as the
Directors may determine. A call may be required to be paid byinstalments. A person upon whom a call is made shall remain liable forcalls made upon him notwithstanding the subsequent transfer of the
Shares in respect of which the call was made.

14.2

A call shall be deemed to have been made at the time when the
resolution of the Directors authorising such call was passed.

14.3

The joint holders of a Share shall be jointly and severally liable to pay
all calls in respect thereof.

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14.4

If a call remains unpaid after it has become due and payable, the personfrom whom it is due shall pay interest on the amount unpaid from the
day it became due and payable until it is paid at such rate as the
Directors may determine (and in addition all expenses that have been
incurred by the Company by reason of such non-payment), but the
Directors may waive payment of the interest or expenses wholly or in
part.

14.5

An amount payable in respect of a Share on issue or allotment or at any
fixed date, whether on account of the par value of the Share or premiumor otherwise, shall be deemed to be a call and if it is not paid all theprovisions of the Articles shall apply as if that amount had become dueand payable by virtue of a call.

14.6

The Directors may issue Shares with different terms as to the amountand times of payment of calls, or the interest to be paid.

14.7

The Directors may, if they think fit, receive an amount from any Member
willing to advance all or any part of the monies uncalled and unpaid
upon any Shares held by him, and may (until the amount would
otherwise become payable) pay interest at such rate as may be agreed
upon between the Directors and the Member paying such amount inadvance.

Provision 1(e)14.8

No such amount paid in advance of calls, whether carrying interest or
not, shall entitle the Member paying such amount to any portion of a
Dividend or other profit or distribution payable in respect of any periodprior to the date upon which such amount would, but for such payment,
become payable.

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15

Forfeiture of Shares

15.1

If a call or instalment of a call remains unpaid after it has become dueand payable the Directors may give to the person from whom it is due
not less than fourteen clear days' notice requiring payment of theamount unpaid together with any interest which may have accrued andany expenses incurred by the Company by reason of such nonpayment. The notice shall specify where payment is to be made andshall state that if the notice is not complied with the Shares in respectof which the call was made will be liable to be forfeited.

15.2

If the notice is not complied with, any Share in respect of which it wasgiven may, before the payment required by the notice has been made,be forfeited by a resolution of the Directors. Such forfeiture shall include
all Dividends, other distributions or other monies payable in respect of
the forfeited Share and not paid before the forfeiture.

15.3

A forfeited Share may be sold, re-allotted or otherwise disposed of onsuch terms and in such manner as the Directors think fit and at any time
before a sale, re-allotment or disposition the forfeiture may be cancelledon such terms as the Directors think fit. Where for the purposes of its
disposal a forfeited Share is to be transferred to any person the
Directors may authorise some person to execute an instrument oftransfer of the Share in favour of that person.

15.4

A person any of whose Shares have been forfeited shall cease to be a
Member in respect of them and shall surrender to the Company forcancellation the certificate for the Shares forfeited and shall remain
liable to pay to the Company all monies which at the date of forfeiture
were payable by him to the Company in respect of those Shares
together with interest at such rate as the Directors may determine, but
his liability shall cease if and when the Company shall have received
payment in full of all monies due and payable by him in respect of thoseShares.

15.5

A certificate in writing under the hand of one Director or Officer that a
Share has been forfeited on a specified date shall be conclusive
evidence of the facts stated in it as against all persons claiming to beentitled to the Share. The certificate shall (subject to the execution of an
instrument of transfer) constitute a good title to the Share and the

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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person to whom the Share is sold or otherwise disposed of shall not bebound to see to the application of the purchase money, if any, nor shall
his title to the Share be affected by any irregularity or invalidity in theproceedings in reference to the forfeiture, sale or disposal of the Share.
15.6

The provisions of the Articles as to forfeiture shall apply in the case of
non-payment of any sum which, by the terms of issue of a Share,
becomes payable at a fixed time, whether on account of the par valueof the Share or by way of premium as if it had been payable by virtue ofa call duly made and notified.

16

Transmission of Shares

16.1

If a Member dies, the survivor or survivors (where he was a joint holder),or his legal personal representatives (where he was a sole holder), shallbe the only persons recognised by the Company as having any title tohis Shares. The estate of a deceased Member is not thereby released
from any liability in respect of any Share, for which he was a joint or soleholder.

16.2

Any person becoming entitled to a Share in consequence of the deathor bankruptcy or liquidation or dissolution of a Member (or in any otherway than by transfer) may, upon such evidence being produced as may
be required by the Directors, elect, by a notice in writing sent by him to
the Company, either to become the holder of such Share or to havesome person nominated by him registered as the holder of such Share.
If he elects to have another person registered as the holder of such
Share he shall sign an instrument of transfer of that Share to that
person. The Directors shall, in either case, have the same right todecline or suspend registration as they would have had in the case of atransfer of the Share by the relevant Member before his death or
bankruptcy or liquidation or dissolution, as the case may be.

16.3

A person becoming entitled to a Share by reason of the death or
bankruptcy or liquidation or dissolution of a Member (or in any othercase than by transfer) shall be entitled to the same Dividends, other
distributions and other advantages to which he would be entitled if hewere the holder of such Share. However, he shall not, before becoming
a Member in respect of a Share, be entitled in respect of it to exercise
any right conferred by membership in relation to general meetings of
the Company and the Directors may at any time give notice requiring

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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any such person to elect either to be registered himself or to have someperson nominated by him be registered as the holder of the Share (butthe Directors shall, in either case, have the same right to decline orsuspend registration as they would have had in the case of a transfer of
the Share by the relevant Member before his death or bankruptcy or
liquidation or dissolution or any other case than by transfer, as the casemay be). If the notice is not complied with within ninety days of being
received or deemed to be received (as determined pursuant to the
Articles), the Directors may thereafter withhold payment of all
Dividends, other distributions, bonuses or other monies payable inrespect of the Share until the requirements of the notice have been
complied with.

17

Amendments of Memorandum and Articles of Association,
Alteration of Capital and Rights of Pre-emption

17.1

The Company may by Ordinary Resolution:

17.2

(a)

increase its authorised share capital by such sum as theOrdinary Resolution shall prescribe and with such rights,
priorities and privileges annexed thereto, as the Company ingeneral meeting may determine;(b)consolidate and divide all or any of its share capital into Sharesof larger amount than its existing Shares;(c)convert all or any of its paid-up Shares into stock, and reconvertthat stock into paid-up Shares of any denomination;(d)by subdivision of its existing Shares or any of them divide thewhole or any part of its share capital into Shares of smaller
amount than is fixed by the Memorandum or into Shares without
par value; and(e)cancel any Shares that at the date of the passing of the Ordinary
Resolution have not been taken or agreed to be taken by any
person and diminish the amount of its share capital by theamount of the Shares so cancelled.

Notwithstanding Articles 3 and 17.1(a) above, subject to any direction
to the contrary that may be given by the Company in a general meetingor except as permitted under the rules and regulations of the

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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Designated Stock Exchange, all new Shares shall, before issue, beoffered to such Members who as at the date of the offer are entitled toreceive notices from the Company of general meetings in proportion, as
far as the circumstances admit, to the number of the existing Shares towhich they are entitled. The offer shall be made by notice specifying thenumber of Shares offered, and limiting a time within which the offer, if
not accepted, will be deemed to be declined, and, after the expiration ofthat time, or on the receipt of an intimation from the Member to whom
the offer is made that such Member declines to accept the Shares
offered, the Directors may dispose of those Shares in such manner as
they think most beneficial to the Company. The Directors may likewise
so dispose of any new Shares which (by reason of the ratio which the
new Shares bear to Shares held by persons entitled to an offer of new
Shares) cannot, in the opinion of the Directors, be conveniently offeredunder this Article 17.2.
17.3

All new Shares created in accordance with the provisions of Article 3
and this Article 17 shall be subject to the same provisions of these
Articles with reference to the payment of calls, liens, transfer,transmission, forfeiture and otherwise as the Shares in the original
share capital.

17.4

Subject to the applicable provisions of the Statute, the Singapore
Companies Act and the rules and regulations of the Designated Stock
Exchange, the Company may by Special Resolution:(a)change its name;(b)alter or add to the Articles;(c)alter or add to the Memorandum with respect to any objects,
powers or other matters specified therein; and(d)reduce its share capital or any capital redemption reserve fund.

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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18

Offices and Places of Business
Subject to the provisions of the Statute, the Company may by resolutionof the Directors change the location of its Registered Office. The
Company may, in addition to its Registered Office, maintain such otheroffices or places of business as the Directors determine.

19

General Meetings

19.1

All general meetings other than annual general meetings shall be called
extraordinary general meetings.

19.2

The Company may, but shall not (unless required by the Statute orwhere applicable, the rules and regulations of the Designated Stock
Exchange and/or any other competent regulatory authority or otherwise
under Applicable Law) be obliged to, in each year hold a general
meeting as its annual general meeting, and shall specify the meeting as
such in the notices calling it. For so long as the Shares of the Company
are listed on the Designated Stock Exchange, the Company shall holdall its general meetings in Singapore (unless prohibited by any
Applicable Law) or such other jurisdiction as permitted or required by
the Applicable Law or the rules or regulations of the Designated Stock
Exchange. At these general meetings the report of the Directors (if any)
shall be presented.

19.3

The Company shall hold its annual general meeting within four months
from the end of its financial year (or such other period as may bepermitted by the Applicable Law or the rules and regulations of the
Designated Stock Exchange).

19.4

The Directors, the chief executive officer or the Chairperson of the boardof Directors may call general meetings, and general meetings shall also
be convened on a Members’ requisition. On such a Members’
requisition, the Directors shall immediately proceed duly to convene an
extraordinary general meeting of the Company to be held as soon aspracticable but in any case not later than two months after the receipt
by the Company of the requisition.

19.5

A Members' requisition is a requisition of Members holding at the dateof deposit of the requisition not less than ten per cent of the total number

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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of paid-up Shares which as at that date carry the right to vote at general
meetings of the Company.
19.6

The Members' requisition must state the objects of the meeting andmust be signed by the requisitionists and deposited at the Registered
Office, and may consist of several documents in like form each signedby one or more requisitionists.

19.7

If there are no Directors as at the date of the deposit of the Members'
requisition or if the Directors do not within twenty-one days after thedate of the deposit of the Members' requisition duly proceed to convene
a general meeting, the requisitionists, or any of them representing morethan fifty per cent of the total voting rights of all of the requisitionists,
may themselves convene a general meeting, but any meeting so
convened shall not be held after the expiration of three months from that
date.

19.8

A general meeting convened by the requisitionists in accordance with
Article 19.7 above shall be convened in the same manner as nearly as
possible as that in which general meetings are to be convened by
Directors.

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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20

Notice of General Meetings

20.1

Any general meeting at which it is proposed to pass a Special
Resolution shall be called by twenty-one calendar days' notice in writingat the least. An annual general meeting and any other extraordinary
general meeting shall be called by fourteen calendar days' notice inwriting at the least; provided always that a general meetingnotwithstanding that it has been called by a shorter notice than thatspecified above shall be deemed to have been duly called if it is soagreed:20.2(a)in the case of an annual general meeting, by all of the Members
entitled to attend and vote thereat; and(b)in the case of an extraordinary general meeting, by a majority innumber of the Members having a right to attend and votethereat, being a majority together holding not less than ninetyfive per cent in par value of the Shares giving that right.

The period of notice shall in each case be exclusive of the day on which
it is despatched and of the day on which the meeting is to be held andshall be given in the manner hereinafter mentioned to all Members otherthan such as are not under the provisions of these Articles and the
Statute entitled to receive such notices from the Company.

20.3

So long as the Shares in the Company are listed on the Designated
Stock Exchange, notices of any general meeting shall be given by
advertisement in the daily press in Singapore and in writing to the
Designated Stock Exchange.

20.4

The Directors may make Communication Facilities available for a
specific general meeting or all general meetings of the Company so thatmembers and other participants may attend and participate at suchgeneral meetings by means of such Communication Facilities. Without
limiting the generality of the foregoing, the Directors may determine thatany general meeting may be held as a Virtual Meeting subject to, whereapplicable, the rules and regulations of the Designated Stock Exchange
and/or any other competent regulatory authority or otherwise under
Applicable Law.

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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20.5

Every notice calling a general meeting shall specify the place, the day
and the hour of the meeting and the general nature of the business tobe conducted at the general meeting. Any notice of a general meeting
called to consider special business shall be accompanied by astatement regarding the effect of any proposed resolution on the
Company in respect of such special business.

20.6

The notice of any general meeting at which Communication Facilities
will be utilised (including any Virtual Meeting) must disclose theCommunication Facilities that will be utilised, including the procedures
to be followed by any member or other participant of the general
meeting who wishes to utilise such Communication Facilities for the
purpose of attending, participating and voting at such meeting.

20.7

The accidental omission to give notice of a general meeting to, or thenon-receipt of notice of a general meeting by, any person entitled toreceive such notice shall not invalidate the proceedings of that general
meeting.

21

Proceedings at General Meetings

21.1

No business shall be transacted at any general meeting unless aquorum is Present. Two Members Present shall be a quorum unlessthere is only one Member of the Company in which case that Member
may constitute a quorum. For the avoidance of doubt, where a Member
is the Depository, one or more person(s) attending as the Depository’s
proxy or as the Depository’s duly authorised representative may counttowards the quorum.

21.2

A person may participate at a general meeting by Communications
Facilities by means of which all the persons participating in the meeting
can communicate with each other simultaneously and instantaneously
using such Communication Facilities. Participation by a person in a
general meeting in this manner is treated as a person being Present atthat meeting.

21.3

A resolution (including a Special Resolution) in writing (in one or morecounterparts) signed by or on behalf of all of the Members for the time
being entitled to receive notice of and to attend and vote at general
meetings (or, being corporations or other non-natural persons, signed

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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by their duly authorised representatives) shall be as valid and effective
as if the resolution had been passed at a general meeting of theCompany duly convened and held.
21.4

If a quorum is not Present within half an hour from the time appointed
for the meeting to commence or if during such a meeting a quorum
ceases to be Present, the meeting, if convened upon a Members'
requisition, shall be dissolved and in any other case it shall standadjourned to the same day in the next week (or if that day is a public
holiday then to the next business day following that public holiday) at
the same time and place or to such other day and at such other time
and/or place as the Directors may by not less than ten calendar days'
notice appoint. At the adjourned meeting any one or more Members
Present shall be a quorum. For the avoidance of doubt, where a
Member is the Depository, one or more person(s) attending as the
Depository’s proxy or as the Depository’s duly authorised
representative may count towards the quorum.

21.5

The Directors may, at any time prior to the time appointed for the
meeting to commence, appoint any person to act as Chairperson of ageneral meeting of the Company or, if the Directors do not make any
such appointment, the Chairperson, if any, of the board of Directors
shall preside as Chairperson at such general meeting. If there is no such
Chairperson, or if such Person shall not be Present within fifteen
minutes after the time appointed for the meeting to commence, or isunwilling to act, the Directors Present shall elect one of their number tobe Chairperson of the meeting.

21.6

If no Director is willing to act as Chairperson or if no Director is Present
within fifteen minutes after the time appointed for the meeting tocommence, the Members Present shall choose one of their number tobe Chairperson of the meeting.

21.7

The Chairperson of any general meeting shall be entitled to attend andparticipate at such general meeting by means of Communication
Facilities, and to act as the Chairperson, in which event:(a)the Chairperson shall be deemed to be Present at the meeting;
and

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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if the Communication Facilities are interrupted or fail for any
reason to enable the Chairperson to hear and be heard by allother Persons attending and participating at the meeting, thenthe other Directors Present at the meeting shall choose another
Director Present to act as Chairperson of the meeting for theremainder of the meeting; provided that (i) if no other Director is
Present at the meeting, or (ii) if all the Directors Present decline
to take the chair, then the meeting shall be automaticallyadjourned to the same day in the next week and at such timeand place as shall be decided by the board of Directors.

21.8

The Chairperson may, with the consent of a meeting at which a quorum
is Present (and shall if so directed by the meeting) adjourn the meetingfrom time to time and from place to place, but no business shall betransacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place.

21.9

If a notice is issued in respect of a general meeting and the Directors,
in their absolute discretion, consider that it is impractical or undesirable
for any reason to hold that general meeting at the place, the day andthe hour specified in the notice calling such general meeting, theDirectors may, subject always to the rules and regulations of the
Designated Stock Exchange and/or any other competent regulatory
authority or otherwise under Applicable Law, postpone the general
meeting to another place, day and/or hour provided that notice of theplace, the day and the hour of the rearranged general meeting is
promptly given to all Members. No business shall be transacted at any
postponed meeting other than the business specified in the notice of theoriginal meeting.

21.10 When a general meeting is adjourned or postponed for thirty days or
more, notice of the adjourned or postponed meeting shall be given as
in the case of an original meeting. The Chairperson of the meeting may(and, if required by the rules or regulations of the Designated Stock
Exchange, shall) appoint at least one scrutineer (who shall be
independent of the persons undertaking the poll process).
21.11 For so long as the Shares of the Company are listed on the Designated
Stock Exchange, if required by the rules or regulations of the
Designated Stock Exchange, all resolutions at general meetings shall

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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be voted by poll unless such requirement is waived by the Designated
Stock Exchange.
21.12 A poll shall be taken as the Chairperson directs, and the result of thepoll shall be deemed to be the resolution of the general meeting at which
the poll was required or demanded.
21.13 A poll demanded on the election of a Chairperson or on a question of
adjournment shall be taken forthwith. A poll demanded on any otherquestion shall be taken at such date, time and place as the Chairpersonof the general meeting directs, and any business other than that uponwhich a poll has been demanded or is contingent thereon may proceed
pending the taking of the poll.
21.14 In the case of an equality of votes the Chairperson shall be entitled to asecond or casting vote.

22

Votes of Members

22.1

Subject to any rights or restrictions attached to any Shares, every
Member Present in any such manner, including a Depository, shall haveone vote for every Share of which such Member is the holder.

Provision 8(a)22.2

In the case of joint holders of Shares, any one of such persons may
vote, but if more than one of such persons is Present at a meeting, theperson whose name stands first on the Register of Members shall alone
be entitled to vote to the exclusion of the votes of the other joint holders.

Provision 8(b)22.3

A Member of unsound mind, or in respect of whom an order has been
made by any court, having jurisdiction in lunacy, may vote, whether ona show of hands or on a poll, by his committee, receiver, curator bonis,or other person on such Member's behalf appointed by that court, andany such committee, receiver, curator bonis or other person may voteby proxy.

22.4

No person shall be entitled to vote at any general meeting unless he isregistered as a Member on the record date for such meeting and unless
all calls or other monies then payable by such Member in respect ofShares have been paid.

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22.5

No objection shall be raised as to the qualification of any voter except
at the general meeting or adjourned general meeting at which the voteobjected to is given or tendered and every vote not disallowed at themeeting shall be valid. Any objection made in due time in accordancewith this Article shall be referred to the Chairperson whose decision
shall be final and conclusive.

22.6

An instrument appointing a proxy shall be deemed to include the rightto demand or join in demanding a poll, to move any resolution oramendment thereto and, if afforded the opportunity, to speak at themeeting the same as any other voting Member. Votes may be casteither personally or by proxy (or in the case of a corporation or othernon-natural person by its duly authorised representative or proxy). A
Member may appoint more than one proxy or the same proxy under one
or more instruments to attend and vote at a meeting. Where a Member
appoints more than one proxy the instrument of proxy shall specify the
number of Shares in respect of which each proxy is entitled to exercise
the related votes.

22.7

A Member, including for the avoidance of doubt a Depository, holding
more than one Share need not cast the votes in respect of such
Member's Shares in the same way on any resolution and therefore may
vote a Share or some or all such Shares either for or against a resolution
and/or abstain from voting a Share or some or all of the Shares and,subject to the terms of the instrument appointing such Member, a proxyappointed under one or more instruments may vote a Share or some or
all of the Shares in respect of which such Member is appointed either
for or against a resolution and/or abstain from voting a Share or someor all of the Shares in respect of which such Member is appointed.

22.8

To the extent permitted by Applicable Law, where a Member (or, where
the Member is the Depository, a Depositor) is required by the rules orregulations of the Designated Stock Exchange or a court order toabstain from voting on a resolution at a general meeting, such Member(or, where the Member is the Depository, a Depositor) shall not be
entitled to vote on the relevant resolution and shall be required toabstain from voting such member's Shares (including by proxy or byattorney or being a corporation by its duly authorised representative) inrespect of such resolution, and if the Member casts any votes (whether
by proxy or by attorney or being a corporation by its duly authorised
representative) in contravention of this Article or, if the rules or

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Provisionsand (e)8(a)APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

regulations of the Designated Stock Exchange require the Company to
do so, the Company shall be entitled to disregard such votes.

23

Proxies

23.1

Any Member entitled to attend, vote and speak at a meeting of theCompany who is the holder of two or more Shares shall be entitled toappoint not more than two proxies to attend, vote and speak instead ofsuch Member at the same general meeting provided that if the Member
is the Depository:(a)the Depository may appoint more than two proxies to attend,
vote and speak at the same general meeting and each proxyshall be entitled to exercise the same powers on behalf of the
Depository as the Depository could exercise;(b)unless the Depository specifies otherwise in a written notice to
the Company, the Depository shall be deemed to haveappointed as the Depository’s proxies to vote on behalf of the
Depository at a general meeting of the Company each of the
Depositors who are individuals and whose names are shown in
the records of the Depository as at a time not earlier than fortyeight hours prior to the time of the relevant general meeting
supplied by the Depository to the Company and notwithstanding
any other provision of these Articles, the appointment of proxies
by virtue of this Article 23.1(b) shall not require an instrument of
proxy or the lodgement of any instrument of proxy;(c)

the Company shall accept as valid in all respects the form of
instrument of proxy approved by the Depository (the“Depository Proxy Form”) for use at the date relevant to thegeneral meeting in question naming a Depositor (the“Nominating Depositor”) and permitting that Nominating
Depositor to nominate a person or persons other than the
Nominating Depositor as the proxy or proxies appointed by the
Depository. A Nominating Depositor who is not a relevantintermediary may nominate not more than two persons to attend
and vote in such Nominating Depositor's place as proxy or
proxies appointed by the Depository, and a Nominating
Depositor who is a relevant intermediary may nominate morethan two persons to attend and vote in its place as proxies
appointed by the Depository. The Company shall, in
determining rights to vote and other matters in respect of a

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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completed Depository Proxy Form submitted to it, have regard
to the instructions given by and the notes (if any) set out in the
Depository Proxy Form. The submission of any Depository
Proxy Form shall not affect the operation of Article 23.1(b) andshall not preclude a Depositor appointed as a proxy by virtue of
Article 23.1(b) from attending and voting at the relevant meetingbut in the event of attendance by such Depositor the Depository
Proxy Form submitted bearing such Depositor's name as theNominating Depositor shall be deemed to be revoked;

23.2

(d)

the Company shall reject any Depository Proxy Form of a
Nominating Depositor if such Nominating Depositor's name is
not shown in the records of the Depository as at a time notearlier than forty-eight hours prior to the time of the relevant
general meeting supplied by the Depository to the Company;
and

(e)

on a poll the maximum number of votes which a Depositor, or
proxies appointed pursuant to a Depository Proxy Form in
respect of that Depositor, is able to cast shall be the number of
Shares credited to the Securities Account of that Depositor as
shown in the records of the Depository as at a time not earlier
than forty-eight hours prior to the time of the relevant general
meeting supplied by the Depository to the Company (or suchtiming as may be stipulated by the Designated Stock Exchange
from time to time), whether that number is greater or smaller
than the number specified in any Depository Proxy Form or
instrument of proxy executed by or on behalf of the Depository.

The instrument appointing a proxy shall be in writing and:(a)in the case of an individual shall be:(i)executed under the hand of the appointor or of such
Member's attorney duly authorised in writing if the
instrument is delivered personally or sent by post; or(ii)authorised by that individual through such method andin such manner as may be approved by the Directors, if
theinstrumentissubmitted
byElectronic
Communication; andD-34

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION(b)in the case of a corporation or other non-natural person, shallbe:(i)under the hand of its duly authorised representative, orin the case of the Depository, signed by its duly
authorised officer by some method or system of
mechanical signature as the Depository may deem
appropriate, if the instrument is delivered personally or
sent by post; or(ii)authorised by that corporation or non-natural person
through such method and in such manner as may beapproved by the Directors, if the instrument is submitted
by Electronic Communication.

23.3

The Directors may, in their absolute discretion, approve the method andmanner for an instrument appointing a proxy to be authorised by anappointor, or deposited with or received by the Company, as well as any
authentication procedure for authentication of such instrument as
contemplated in Articles 23.2(a)(ii) and 23.2(b)(ii) for application to such
Members or class of Members as they may determine. Where the
Directors do not so approve and designate in relation to a Member(whether of a class or otherwise), Article 23.2(a)(i) and/or (as the casemay be) Article 23.2(b)(i) shall apply, provided that if the instrument
appointing a proxy is delivered personally or sent by post, it shall bedeposited physically at the Registered Office not less than 48 hours
before the time appointed for the meeting or adjourned meeting tocommence at which the person named in the instrument proposes to
vote.

23.4

A proxy need not be a Member.

23.5

The instrument appointing a proxy and (if required by the board of
Directors) the power of attorney or other authority (if any) under which
it is signed or authorised on behalf of the appointor (which shall, for thispurpose, include a Depositor), or a certified copy of such power orauthority:(a)Provision 8(c)if sent personally or by post, must be delivered to such place or
one of such places (if any) as may be specified for that purpose
in or by way of note to or in any document accompanying the

D-35

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

notice convening the meeting (or, if no place is so specified at
the Registration Office or the Office, as may be appropriate); or(b)

if submitted by Electronic Communication, must be received
through such means as may be specified by the Company forthat purpose in or by way of note to or in any document
accompanying the notice convening the meeting, and in either
case, not less than forty-eight hours (or such timing as may be
stipulated by the Designated Stock Exchange from time to time)
before the time appointed for holding the meeting or adjourned
meeting at which the person named in the instrument proposes
to vote or, in the case of a poll taken subsequently to the dateof a meeting or adjourned meeting, for the taking of the poll, andin default the instrument of proxy shall not be treated as valid.
No instrument appointing a proxy shall be valid after the
expiration of twelve months from the date named in it as thedate of its execution, except at an adjourned meeting or on apoll demanded at a meeting or an adjourned meeting in cases
where the meeting was originally held within twelve months fromsuch date. Delivery of an instrument appointing a proxy shall notpreclude a Member from attending and voting in person at themeeting convened and in such event, the instrument appointing
a proxy shall be deemed to be revoked.

23.6

The Directors may, in their absolute discretion, and in relation to such
Members or class of Members as they may determine, specify themeans through which instruments appointing a proxy may be submitted
by Electronic Communication, as contemplated in Article 23.5(b).
Where the Directors do not so specify, Article 23.5(a) shall apply.

23.7

The Chairperson may in any event at the Chairperson's discretion
declare that an instrument of proxy shall be deemed to have been duly
deposited. An instrument of proxy that is not deposited in the mannerpermitted, or which has not been declared to have been duly depositedby the Chairperson, shall be invalid.

23.8

The instrument appointing a proxy may be expressed to be for aparticular meeting or any adjournment thereof or generally until
revoked. An instrument appointing a proxy shall be deemed to confer
the authority to demand or join or concur in demanding a poll.

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Provision 8(d)APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

23.9

Votes given in accordance with the terms of an instrument of proxy shallbe valid notwithstanding the previous death or insanity of the principal
or revocation of the proxy or of the authority under which the proxy was
executed, or the transfer of the Share in respect of which the proxy is
given unless notice in writing of such death, insanity, revocation ortransfer was received by the Company at the Registered Office before
the commencement of the general meeting, or adjourned meeting at
which it is sought to use the proxy.

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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24

Corporate Members

24.1

Any corporation or other non-natural person which is a Member may inaccordance with its constitutional documents, or in the absence of suchprovision by resolution of its directors or other governing body,authorise such person as it thinks fit to act as its representative at any
meeting of the Company or of any class of Members, and the person
so authorised shall be entitled to exercise the same powers on behalfof the corporation which he represents as the corporation could
exercise if it were an individual Member.

24.2

If a Depository (or its nominee(s)), being a corporation, is a Member, it
may authorise such persons as it sees fit to act as its representative at
any meeting of the Company or at any meeting of any class of Members
provided that the authorisation shall specify the number and class of
Shares in respect of which each such representative is so authorised.
Each person so authorised under the provisions of this Article shall bedeemed to have been duly authorised without further evidence of thefacts and be entitled to exercise the same rights and powers on behalfof the Depository (or its nominee(s)) as if such person was theregistered holder of such Shares held by the Depository (or its
nominee(s)).

25

Shares that May Not be Voted
Shares in the Company that are beneficially owned by the Company
shall not be voted, directly or indirectly, at any meeting and shall not becounted in determining the total number of outstanding Shares at any
given time.

26

Directors and Chief Executive Officer(s)26.1There shall be a board of Directors consisting of not less than one
person provided however that the Company may by Ordinary
Resolution increase or reduce the limits in the number of Directors. All
Directors of the Company shall be natural persons.

26.2

The Directors may from time to time appoint one or more of their bodyto be Chief Executive Officer or Chief Executive Officers (or otherequivalent position) of the Company and may from time to time (subject
to the provisions of any contract between such Director(s) and theD-38

Provision 9(a)Provision 9(i)

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

Company) remove or dismiss such Director(s) from the office of Chief
Executive Officer(s) and appoint another or others in such Director(s)place(s). Where an appointment is for a fixed term, such term shall not
exceed five years.
26.3

A Chief Executive Officer (or person holding an equivalent position)
shall at all times be subject to the control of the Directors but subject
thereto the Directors may from time to time entrust to and confer upona Chief Executive Officer (or person holding an equivalent position) for
the time being such of the powers exercisable under these Articles by
the Directors as they may think fit and may confer such powers for suchtime and to be exercised on such terms and conditions and with such
restrictions as they think expedient and they may confer such powers
either collaterally with or to the exclusion of and in substitution for all or
any of the powers of the Directors in that behalf and may from time totime revoke, withdraw, alter or vary all or any of such powers.

27

Powers of Directors

27.1

Subject to the provisions of the Statute, the Memorandum and the
Articles and to any directions given by Special Resolution, the businessof the Company shall be managed by the Directors who may exercise
all the powers of the Company. No alteration of the Memorandum or
Articles and no such direction shall invalidate any prior act of the
Directors which would have been valid if that alteration had not been
made or that direction had not been given. A duly convened meeting of
Directors at which a quorum is present may exercise all powers
exercisable by the Directors.

27.2

All cheques, promissory notes, drafts, bills of exchange and othernegotiable or transferable instruments and all receipts for monies paid
to the Company shall be signed, drawn, accepted, endorsed orotherwise executed as the case may be in such manner as the Directors
shall determine by resolution.

27.3

The Directors on behalf of the Company may pay a gratuity or pension
or allowance on retirement to any Director who has held any othersalaried office or place of profit with the Company or to his widow ordependants and may make contributions to any fund and pay premiums
for the purchase or provision of any such gratuity, pension or allowance.

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Provision 9(j)APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

Provision 6

27.4

The Directors may exercise all the powers of the Company to borrowmoney and to mortgage or charge its undertaking, property and assets(present and future) and uncalled capital or any part thereof and to issue
debentures, debenture stock, mortgages, bonds and other suchsecurities whether outright or as security for any debt, liability or
obligation of the Company or of any third party.

28

Appointment and Removal of Directors

28.1

The Company may by Ordinary Resolution appoint any person to be a
Director or may by Ordinary Resolution remove any Director.

28.2

At each Annual General Meeting one-third of the Directors for the time
being (or, if their number is not a multiple of three, the number nearest
to but not less than one-third), selected in accordance with Article 28.3,
shall retire from office by rotation (in addition to any Director retiring
pursuant to Article 28.4), provided always that, if required by the rules
and regulations of the Designated Stock Exchange, all Directors shallretire at least once every three years.

28.3

The Directors to retire in every year shall be those subject to retirementby rotation who have been longest in office since their last re-election
or appointment and so that as between persons who became or werelast re-elected Directors on the same day those to retire shall (unlessthey otherwise agree among themselves) be determined by lot. A
retiring Director shall be eligible for re-election.

28.4

The Directors may appoint any person to be a Director, either to fill acasual vacancy or as an additional Director provided that theappointment does not cause the number of Directors to exceed any
number fixed by or in accordance with the Articles as the maximum
number of Directors. Any person so appointed by the Directors shallhold office only until the next annual general meeting. Such Director
shall then be eligible for re-election, but shall not be taken into accountin determining the number of Directors who are to retire by rotation atsuch meeting.

Provision 9(b)28.5

No person other than a Director retiring at the meeting shall, unlessrecommended by the Directors for election, be eligible for appointment
as a Director at any general meeting unless not less than eleven nor
more than forty-two clear calendar days (exclusive of the date on which

Provision 9(h)D-40

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

the notice is given) before the date appointed for the meeting there shallhave been lodged at the Registered Office notice in writing signed bysome Member (other than the person to be proposed) duly qualified toattend and vote at the meeting for which such notice is given of such
Member's intention to propose such person for election or notice inwriting signed by the person to be proposed giving such person'sconsent to the nomination and signifying that person's candidature forthe office, provided always that in the case of a person recommended
by the Directors for election not less than nine clear calendar days'
notice shall be necessary and notice of each and every such person
shall be served on the Members at least seven calendar days prior tothe meeting at which the election is to take place.

29

Vacation of Office of Director
The office of a Director shall be vacated if:(a)the Director gives notice in writing to the Company that heresigns the office of Director; or(b)

the Director absents himself, herself or itself (for the avoidanceof doubt, without being represented by proxy) from threeconsecutive meetings of the board of Directors without special
leave of absence from the Directors, and the Directors pass a
resolution that such Director has by reason of such absence
vacated office; or(c)the Director dies, has a bankruptcy order made against such
Director or makes any arrangement or composition with such
Director's creditors generally; orProvision 9(g)(d)

the Director becomes mentally disordered (including being of
unsound mind) and incapable of managing such Director's
affairs or if in Singapore or elsewhere an order shall be madeby any court claiming jurisdiction in that behalf on the ground(however formulated) of mental disorder for such Director's
detention or for the appointment of a guardian or for theappointment of a receiver or other person (by whatever namecalled) to exercise powers with respect to such Director's
property or affairs;

Provision 9(g)D-41

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION(e)the Director shall become disqualified from acting as a director
in any jurisdiction for reasons other than on technical grounds(in which event such Director must immediately resign from theboard); or(f)

the Director is removed from office by Ordinary Resolution.

30

Proceedings of Directors

30.1

The quorum for the transaction of the business of the Directors may be
fixed by the Directors, and unless so fixed shall be a majority of the
Directors then in office, including the Chairperson; provided, however,a quorum shall nevertheless exist at a meeting at which a quorum would
exist but for the fact that the Chairperson is voluntarily absent from themeeting and notifies the board of Directors his decision to be absent
from that meeting, before or at the meeting.

30.2

Subject to the provisions of the Articles, the Directors may regulate theirproceedings as they think fit. Questions arising at any meeting shall bedecided by a majority of votes. In the case of an equality of votes(except where only two Directors are present and form the quorum or
when only two Directors are competent to vote on the question in issue),the Chairperson shall have a second or casting vote.

30.3

A person may participate in a meeting of the Directors or any committeeof Directors by Communications Facilities by means of which all the
persons participating in the meeting can simultaneously andinstantaneously communicate with each other at the same time.
Participation by a person in a meeting in this manner is treated aspresence in person at that meeting. Unless otherwise determined by the
Directors, the meeting shall be deemed to be held at the place where
the Chairperson is located, or deemed to be located, at the start of themeeting.

30.4

A resolution in writing (in one or more counterparts) signed by all the
Directors or all the members of a committee of the Directors or, in thecase of a resolution in writing relating to the removal of any Director or
the vacation of office by any Director, all of the Directors other than the
Director who is the subject of such resolution shall be as valid andeffectual as if it had been passed at a meeting of the Directors, orcommittee of Directors as the case may be, duly convened and held.

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Provision 9(n)Provision 9(m)APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATIONThe expressions “in writing” and “signed” include approval by any such
Director by facsimile or any form of Electronic Communication approvedby the Directors for such purpose from time to time and in accordancewith the Applicable Law.
30.5

A Director may, or other Officer on the direction of a Director shall, calla meeting of the Directors by at least two days' notice in writing to every
Director which notice shall set forth the general nature of the businessto be considered unless notice is waived by all the Directors either at,
before or after the meeting is held. To any such notice of a meeting of
the Directors all the provisions of the Articles relating to the giving ofnotices by the Company to the Members shall apply mutatis mutandis.

30.6

The continuing Directors (or a sole continuing Director, as the case maybe) may act notwithstanding any vacancy in their body, but if and solong as their number is reduced below the number fixed by or pursuant
to the Articles as the necessary quorum of Directors the continuing
Directors or Director may act only for the purpose of increasing thenumber of Directors to be equal to such fixed number, or of summoninga general meeting of the Company, but for no other purpose (except inan emergency). If there be no Directors or Director able or willing to act,
then any two Members may summon a general meeting for the purposeof appointing Directors.

30.7

The Directors may elect and appoint a Chairperson by the affirmative
vote of a simple majority of the Directors then in office, and determine
the period for which the Chairperson is to hold office. The Chairperson
shall preside as chairperson at every meeting of the board of Directors.
To the extent the Chairperson is not present within five minutes after
the time appointed for the meeting to commence, the Directors present
may choose one of their number to be Chairperson of the meeting.

30.8

All acts done by any meeting of the Directors or of a committee of the
Directors shall, notwithstanding that it is afterwards discovered that
there was some defect in the appointment of any Director, and/or thatthey or any of them were disqualified, and/or had vacated their office
and/or were not entitled to vote, be as valid as if every such person had
been duly appointed and/or not disqualified to be a Director and/or had
not vacated their office and/or had been entitled to vote, as the casemay be.

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Provision 9(k)APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

30.9

A Director may be represented at any meetings of the board of Directors
by a proxy appointed in writing by him. The proxy shall count towards
the quorum and the vote of the proxy shall for all purposes be deemed
to be that of the appointing Director.

31

Alternate Directors

31.1

Any Director may at any time by writing under such Director's hand anddeposited at the Registered Office, or delivered at a meeting of the
Directors, nominate any person (other than another Director) for
appointment to be such Director's Alternate Director and may in likemanner at any time terminate such appointment. Such appointment,
unless previously approved by the majority of the other Directors, shallhave effect only upon and subject to being so approved. A person shallnot act as Alternate Director to more than one Director at the same time.

Provision 9(l)31.2

An Alternate Director shall be entitled to contract and be interested inand benefit from contracts or arrangements or transactions and to be
repaid expenses and to be indemnified to the same extent mutatis
mutandis as if such person were a Director but such person shall not be
entitled to receive from the Company in respect of such person's
appointment as Alternate Director any remuneration except only suchpart (if any) of the remuneration otherwise payable to such person's
principal as such principal may by notice in writing to the Company fromtime to time direct, provided always that any fees payable to such
Alternate Director shall be deducted from the relevant appointing
principal's remuneration.

Provision 9(l)D-44

APPENDIX D: PROPOSED NEW MEMORANDUM AND
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32

Directors' Interests

32.1

A Director may hold any other office or place of profit under theCompany (other than the office of Auditor) in conjunction with his officeof Director for such period and on such terms as to remuneration andotherwise as the Directors may determine.

32.2

A Director may act by himself, herself, itself or by, through or on behalfof such Director's firm in a professional capacity for the Company andthe Director or the Director's firm shall be entitled to remuneration for
professional services as if the Director were not a Director.

32.3

A Director may be or become a director or other officer of or otherwiseinterested in any company promoted by the Company or in which theCompany may be interested as a shareholder, a contracting party orotherwise, and no such Director shall be accountable to the Company
for any remuneration or other benefits received by the Director as adirector or officer of, or from such Director's interest in, such othercompany.

32.4

No person shall be disqualified from the office of Director or prevented
by such office from contracting with the Company, either as vendor,
purchaser or otherwise, nor shall any such contract or any contract ortransaction entered into by or on behalf of the Company in which any
Director shall be in any way interested be or be liable to be avoided, norshall any Director so contracting or being so interested be liable toaccount to the Company for any profit realised by or arising inconnection with any such contract or transaction by reason of such
Director holding office or of the fiduciary relationship thereby
established. A Director shall not vote in respect of any contract or
proposed contract or transaction in which such Director has directly or
indirectly any personal material interest.

32.5

Notwithstanding any other provision of the Articles, a Director that is in any
way interested in a proposed contract or transaction, whether directly or
indirectly, may be counted as part of the quorum for a meeting of the
Directors at which a resolution in respect of such proposed contract or
proposed transaction is tabled provided that such an interested Director
shall not be permitted to vote in respect of such proposed contract or
proposed transaction at such board meeting (or pursuant to a resolution inwriting to be signed by all the Directors or all the members of a committee

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Provision 9(e)APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATIONof the Directors whom are entitled to vote on same) notwithstanding any
notice given to the board of Directors regarding such interest.

33

Minutes
The Directors shall cause minutes to be made in books kept for the
purpose of recording all appointments of Officers made by the Directors,
all proceedings at meetings of the Company or the holders of any classof Shares and of the Directors, and of committees of the Directors,
including the names of the Directors present at each meeting.

34

Delegation of Directors' Powers

34.1

The Directors may delegate any of their powers, authorities anddiscretions, including the power to sub-delegate, to any committee
consisting of one or more Directors (including, without limitation, theAudit Committee, the Remuneration Committee and the Nominating
Committee). Any such delegation may be made subject to any
conditions the Directors may impose and either collaterally with or to the
exclusion of their own powers and any such delegation may be revokedor altered by the Directors. Subject to any such conditions, theproceedings of a committee of Directors shall be governed by the
Articles regulating the proceedings of Directors, so far as they arecapable of applying.

34.2

The Directors may establish any committees, local boards or agencies
or appoint any person to be a manager or agent for managing the affairsof the Company and may appoint any person to be a member of suchcommittees, local boards or agencies. Any such appointment may bemade subject to any conditions the Directors may impose, and either
collaterally with or to the exclusion of their own powers and any suchappointment may be revoked or altered by the Directors. Subject to any
such conditions, the proceedings of any such committee, local board or
agency shall be governed by the Articles regulating the proceedings of
Directors, so far as they are capable of applying.

34.3

The Directors may adopt formal written charters for committees. Eachof these committees shall be empowered to do all things necessary to
exercise the rights of such committee set forth in the Articles and shallhave such powers as the Directors may delegate pursuant to the
Articles and as required by the rules and regulations of the Designated
Stock Exchange and/or any other competent regulatory authority or

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

otherwise under Applicable Law. Each of the Audit Committee, theRemuneration Committee and the Nominating Committee, if
established, shall consist of such number of Directors as the Directors
shall from time to time determine (or such minimum number as may berequired from time to time by the rules and regulations of the Designated
Stock Exchange and/or any other competent regulatory authority orotherwise under Applicable Law). For so long as any class of Shares islisted on the Designated Stock Exchange, the Audit Committee, theRemuneration Committee and the Nominating Committee shall bemade up of such number of Independent Directors as is required fromtime to time by the rules and regulations of the Designated Stock
Exchange and/or any other competent regulatory authority or otherwise
under Applicable Law.
34.4

The Directors may by power of attorney or otherwise appoint any person
to be the agent of the Company on such conditions as the Directors may
determine, provided that the delegation is not to the exclusion of theirown powers and may be revoked by the Directors at any time.

34.5

The Directors may by power of attorney or otherwise appoint any
company, firm, person or body of persons, whether nominated directly
or indirectly by the Directors, to be the attorney or authorised signatoryof the Company for such purpose and with such powers, authorities anddiscretions (not exceeding those vested in or exercisable by the
Directors under the Articles) and for such period and subject to suchconditions as they may think fit, and any such powers of attorney orother appointment may contain such provisions for the protection andconvenience of persons dealing with any such attorneys or authorised
signatories as the Directors may think fit and may also authorise any
such attorney or authorised signatory to delegate all or any of thepowers, authorities and discretions vested in him.

34.6

The Directors may appoint such Officers as they consider necessary onsuch terms, at such remuneration and to perform such duties, andsubject to such provisions as to disqualification and removal as the
Directors may think fit. Unless otherwise specified in the terms of his
appointment an Officer may be removed by resolution of the Directors
or Members. An Officer may vacate his office at any time if he gives
notice in writing to the Company that he resigns his office.

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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35[Reserved]

36

Remuneration of Directors

36.1

The remuneration of the Directors shall from time to time be determinedby an Ordinary Resolution of the Company and shall not be increased
except pursuant to an Ordinary Resolution passed at a general meeting
where notice of the proposed increase shall have been given in thenotice convening the general meeting. The Directors shall also beentitled to be paid all travelling, hotel and other expenses properly
incurred by them in connection with their attendance at meetings of
Directors or committees of Directors, or general meetings of theCompany, or separate meetings of the holders of any class of Sharesor debentures of the Company, or otherwise in connection with thebusiness of the Company or the discharge of their duties as a Director,
or to receive a fixed allowance in respect thereof as may be determinedby the Directors, or a combination partly of one such method and partly
the other.

36.2

The Directors may by resolution approve additional remuneration to any
Director for any services which in the opinion of the Directors go beyond
his ordinary routine work as a Director. Any fees paid to a Director who
is also counsel, attorney or solicitor to the Company, or otherwise
serves it in a professional capacity shall be in addition to his
remuneration as a Director.

36.3

Notwithstanding Articles 36.1 and 36.2 above, all remuneration in thecase of a Director other than an Executive Director shall be payable bya fixed sum and shall not at any time be by commission on or
percentage of the profits or turnover, and no Director whether an
Executive Director or otherwise shall be remunerated by a commission
on or a percentage of turnover.

Provision 9(d)D-48

Provision 9(c)

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

37

Authentication

37.1

Any Director or a Company secretary or any person appointed by the
Directors for the purpose of authentication may authenticate any
documents affecting the Memorandum and Articles of the Company andany resolution passed by the Company or the Directors or any
committee, and any books, records, documents and financial
statements relating to the business of the Company, and to certify
copies thereof or extracts therefrom as true copies or extracts, and if
any books, records, documents or accounts financial statements areelsewhere than at the Registered Office or the head office the local
manager or other officer of the Company having the custody thereof
shall be deemed to be a person so appointed by the Directors.

37.2

A document purporting to be a copy of a resolution, or an extract fromthe minutes of a meeting, of the Company or of the Directors or any
committee which is so certified shall be conclusive evidence in favourof all persons dealing with the Company upon the faith thereof that such
resolution has been duly passed or, as the case may be, that suchminutes or extract is a true and accurate record of proceedings at a duly
constituted meeting.

37.3

Any authentication or certification made pursuant to this Article 37 may
be made by any electronic means approved by the Directors for such
purpose from time to time incorporating, if the Directors deem
necessary, the use of security and/or identification procedures anddevices approved by the Directors.

38

Seal

38.1

The Company may, if the Directors so determine, have a Seal. The Seal
shall only be used by the authority of the Directors or of a committee of
the Directors authorised by the Directors. Every instrument to which theSeal has been affixed shall be signed by at least one person who shallbe either a Director or some Officer or other person appointed by the
Directors for the purpose.

38.2

The Company may have for use in any place or places outside the
Cayman Islands a duplicate Seal or Seals each of which shall be a
facsimile of the common Seal of the Company and, if the Directors so

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

determine, with the addition on its face of the name of every place where
it is to be used.
38.3

A Director or Officer, representative or attorney of the Company may
without further authority of the Directors affix the Seal over his signaturealone to any document of the Company required to be authenticated byhim under seal or to be filed with the Registrar of Companies in the
Cayman Islands or elsewhere wheresoever.

39

Dividends, Distributions and Reserve

39.1

Subject to the Statute and this Article and except as otherwise provided
by the rights attached to any Shares, the Directors may resolve to pay
Dividends and other distributions on Shares in issue and authorise
payment of the Dividends or other distributions out of the funds of theCompany lawfully available therefor. A Dividend shall be deemed to be
an interim Dividend unless the terms of the resolution pursuant to which
the Directors resolve to pay such Dividend specifically state that such
Dividend shall be a final Dividend. No Dividend or other distribution shallbe paid except out of the realised or unrealised profits of the Company,out of the share premium account or as otherwise permitted by law.

39.2

Except as otherwise provided by the rights attached to any Shares, all
Dividends and other distributions shall be paid according to the parvalue of the Shares that a Member holds. If any Share is issued onterms providing that it shall rank for Dividend as from a particular date,that Share shall rank for Dividend accordingly, provided that where such
Shares are partly paid, all Dividends or other profits or distributions must
be apportioned and paid proportionately to the amounts paid or credited
as paid on the partly paid Shares.

Provision 1(e)39.3

For the purposes of this Article 39, amounts paid or credited as paid on
a Share in advance of calls are to be ignored.

Provision 1(e)39.4

The Directors may deduct from any Dividend or other distribution
payable to any Member all sums of money (if any) then payable by him
to the Company on account of calls or otherwise.

39.5

The Directors may resolve that any Dividend or other distribution be
paid wholly or partly by the distribution of specific assets and inparticular (but without limitation) by the distribution of shares,

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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debentures, or securities of any other company or in any one or moreof such ways and where any difficulty arises in regard to such
distribution, the Directors may settle the same as they think expedientand in particular may issue fractional Shares and may fix the value for
distribution of such specific assets or any part thereof and may
determine that cash payments shall be made to any Members upon thebasis of the value so fixed in order to adjust the rights of all Members
and may vest any such specific assets in trustees in such manner as
may seem expedient to the Directors.
39.6

Except as otherwise provided by the rights attached to any Shares,
Dividends and other distributions may be paid in any currency. The
Directors may determine the basis of conversion for any currency
conversions that may be required and how any costs involved are to be
met.

39.7

The Directors may, before resolving to pay any Dividend or other
distribution, set aside such sums as they think proper as a reserve orreserves which shall, at the discretion of the Directors, be applicable forany purpose of the Company and pending such application may, at thediscretion of the Directors, be employed in the business of theCompany.

39.8

Any Dividend, other distribution, interest or other monies payable incash in respect of Shares may be paid by wire transfer to the holder orby cheque or warrant sent through the post directed to the registeredaddress of the holder or, in the case of joint holders, to the registeredaddress of the holder who is first named on the Register of Members or
to such person and to such address as such holder or joint holders may
in writing direct. Every such cheque or warrant shall be made payable
to the order of the person to whom it is sent. Any one of two or more
joint holders may give effectual receipts for any Dividends, other
distributions, bonuses, or other monies payable in respect of the Shareheld by them as joint holders.

39.9

No Dividend or other distribution shall bear interest against theCompany.

39.10 Any Dividend or other distribution which cannot be paid to a Member
and/or which remains unclaimed after six months from the date on
which such Dividend or other distribution becomes payable may, in the

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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discretion of the Directors, be paid into a separate account in the
Company's name, provided that the Company shall not be constituted
as a trustee in respect of that account and the Dividend or other
distribution shall remain as a debt due to the Member. Any Dividend orother distribution which remains unclaimed after a period of six years
from the date on which such Dividend or other distribution becomespayable shall be forfeited and shall revert to the Company.

40

Capitalisation
The Directors may at any time capitalise any sum standing to the creditof any of the Company's reserve accounts or funds (including the sharepremium account and capital redemption reserve fund) or any sum
standing to the credit of the profit and loss account or otherwise
available for distribution; appropriate such sum to Members in the
proportions in which such sum would have been divisible amongst such
Members had the same been a distribution of profits by way of Dividendor other distribution; and apply such sum on their behalf in paying up in
full unissued Shares for allotment and distribution credited as fully paidup to and amongst them in the proportion aforesaid. In such event the
Directors shall do all acts and things required to give effect to suchcapitalisation, with full power given to the Directors to make suchprovisions as they think fit in the case of Shares becoming distributablein fractions (including provisions whereby the benefit of fractional
entitlements accrue to the Company rather than to the Members
concerned). The Directors may authorise any person to enter on behalfof all of the Members interested into an agreement with the Company
providing for such capitalisation and matters incidental or relating
thereto and any agreement made under such authority shall be effective
and binding on all such Members and the Company.

41

Books of Account

41.1

The Directors shall cause proper books of account (including, whereapplicable, material underlying documentation including contracts andinvoices) to be kept with respect to all sums of money received andexpended by the Company and the matters in respect of which thereceipt or expenditure takes place, all sales and purchases of goods by
the Company and the assets and liabilities of the Company. Such booksof account must be retained for a minimum period of five years from thedate on which they are prepared. Proper books shall not be deemed to
be kept if there are not kept such books of account as are necessary to

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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give a true and fair view of the state of the Company's affairs and to
explain its transactions.
41.2

The Directors shall determine whether and to what extent and at whattimes and places and under what conditions or regulations the accounts
and books of the Company or any of them shall be open to theinspection of Members not being Directors and no Member (not beinga Director) shall have any right of inspecting any account or book or
document of the Company except as conferred by Statute or authorisedby the Directors or by the Company in general meeting.

41.3

The Directors may cause to be prepared and to be laid before theCompany in general meeting profit and loss accounts, balance sheets,
group accounts (if any) and such other reports and accounts as may berequired by law.

42

Audit

42.1

The Directors may appoint an Auditor of the Company who shall holdoffice on such terms as the Directors determine, subject to any
requirements as may be prescribed by the Designated Stock Exchange.

42.2

Without prejudice to the freedom of the Directors to establish any othercommittee, if the Shares (or depositary receipts therefor) are listed orquoted on the Designated Stock Exchange, and if required by the rules
and regulations of the Designated Stock Exchange and/or any othercompetent regulatory authority or otherwise under Applicable Law, theDirectors shall establish and maintain an Audit Committee as acommittee of the Directors and shall adopt a formal written Audit
Committee charter and review and assess the adequacy of the formal
written charter on an annual basis. The composition and responsibilitiesof the Audit Committee shall comply with the rules and regulations of
the Designated Stock Exchange and/or any other competent regulatory
authority or otherwise under Applicable Law.

42.3

If the Shares (or depositary receipts therefor) are listed or quoted on the
Designated Stock Exchange, the Company shall conduct anappropriate review of all related party transactions on an ongoing basis
and shall utilise the Audit Committee for the review and approval ofpotential conflicts of interest.

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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42.4

The remuneration of the Auditor shall be fixed by the Audit Committee(if one exists). If no Audit Committee exists, the remuneration of the
Auditor shall be determined by the Directors.

42.5

If the office of Auditor becomes vacant by resignation or death of the
Auditor, or by the Auditor becoming incapable of acting by reason ofillness or other disability at a time when such Auditor's services are
required, the Directors shall fill the vacancy and determine theremuneration of such Auditor.

42.6

Every Auditor of the Company shall have a right of access at all times
to the books and accounts and vouchers of the Company and shall beentitled to require from the Directors and Officers such information andexplanation as may be necessary for the performance of the duties of
the Auditor.

42.7

Auditors shall, if so required by the Directors, make a report on theaccounts of the Company during their tenure of office at the next annual
general meeting following their appointment in the case of a company
which is registered with the Registrar of Companies as an ordinary
company, and at the next extraordinary general meeting following their
appointment in the case of a company which is registered with theRegistrar of Companies as an exempted company, and at any othertime during their term of office, upon request of the Directors or any
general meeting of the Members.

42.8

Any payment made to members of the Audit Committee (if one exists)shall require the review and approval of the Directors, with any Director
interested in such payment abstaining from such review and approval.

43

Notices

43.1

Notices shall be in writing and may be given by the Company to any
Member either personally or by sending it by courier, post, cable, telex,
fax or e-mail to him, her or it or to such Member's address as shown in
the Register of Members or at any other address supplied by such
Member to the Company. Notice may also be served in accordance withthe rules and regulations of the Designated Stock Exchange and/or any
other competent regulatory authority or by placing it on the Company’s
Website.

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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43.2

Without prejudice to the provisions of Article 43.1, but subject otherwise
to the Applicable Law and the rules and regulations of the Designated
Stock Exchange relating to Electronic Communication, any notice or
document (including, without limitation, any financial statements,
balance sheet or report) which is required or permitted to be given, sent
or served under the Applicable Law, the rules or regulations of the
Designated Stock Exchange or under these Articles by the Company orby the Directors, to a Member may be given, sent or served using
Electronic Communication:(a)to the current address of that person; and/or(b)

by making it available on the Company’s Website, in
accordance with the provisions of these Articles, the Applicable
Law and the rules and regulations of the Designated Stock
Exchange.

43.3

When the Company uses Electronic Communication to send a notice or
document to a Member, the Company shall inform the Member as soon
as practicable of how to request a physical copy of that notice or
document from the Company. The Company shall provide a physicalcopy of that notice or document upon such request.

43.4

For the purposes of Article 43.2 above, a Member shall be implied tohave agreed to receive such notice or document by way of such
Electronic Communication and shall not have a right to elect to receive
a physical copy of such notice or document.

43.5

Notwithstanding Article 43.4 above, the Directors may, at theirdiscretion, at any time give a Member an opportunity to elect within a
specified period of time whether to receive such notice or document by
way of Electronic Communication or as a physical copy, and a Member
shall be deemed to have consented to receive such notice or document
by way of Electronic Communication if such Member was provided withsuch an opportunity and such Member failed to make an election within
the specified time, and such Member shall not in such an event have aright to receive a physical copy of such notice or document.

43.6

Subject to the rules and regulations of the Designated Stock Exchange,
where a notice or document is served to a Member by making it
available on the Company’s website pursuant to Article 43.2(b) above,

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
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the Company shall give separate notice to the Member of the
publication of the notice or document on that website and the mannerin which the notice or document may be accessed by any one or moreof the following means:

43.7

(a)

by sending such separate notice to the Member personally or
through the post or by fax pursuant to Article 43.1;(b)by sending such separate notice to the Member using Electronic
Communication to his current address pursuant to Article
43.2(a);(c)

by way of advertisement in a daily newspaper; and/or(d)by way of announcement on the Designated Stock Exchange.

Where a notice is sent by:(a)courier; service of the notice shall be deemed to be effected bydelivery of the notice to a courier company, and shall bedeemed to have been received on the third day (not including
Saturdays or Sundays or public holidays) following the day on
which the notice was delivered to the courier;(b)post; service of the notice shall be deemed to be effected byproperly addressing, pre paying and posting a letter containing
the notice, and shall be deemed to have been received on thefifth day (not including Saturdays or Sundays or public holidays
in the Cayman Islands) following the day on which the notice
was posted;(c)cable, telex or fax; service of the notice shall be deemed to beeffected by properly addressing and sending such notice andshall be deemed to have been received on the same day that it
was transmitted;(d)e-mail or other Electronic Communication; service of the notice
shall be deemed to be effected by:(i)transmitting
thee-mailor
otherElectronic
Communication to the current address of the intended
recipient pursuant to Article 43.2(a) and the notice shallbe deemed to have been received at the time of

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

transmission of the Electronic Communication by theemail server or facility operated by the Company or its
service provider to the current address of such person(notwithstanding any delayed receipt, non-delivery or“returned mail” reply message or any other error
message indicating that the e-mail or other Electronic
Communication was delayed or not successfully sent),
unless otherwise provided under the Applicable Law
and/or the rules or regulations of the Designated Stock
Exchange, and it shall not be necessary for the receiptof the e-mail or other Electronic Communication to beacknowledged by the recipient; and(ii)making it available on the Company’s Website pursuant
to Article 43.2(b) and the notice shall be deemed to havebeen duly given, sent or served on the date on which
the notice or document is first made available on the
Company’s website, unless otherwise provided underthe Applicable Law and/or the rules or regulations of the
Designated Stock Exchange.

43.8

Any notice or other document delivered or sent by post to, or left at theaddress of, any Member or given, sent or served by Electronic
Communication in accordance with these Articles shall, notwithstandingthat such Member is then dead, suffering from mental disorder orbankrupt or that any other event has occurred, and whether or not theCompany has notice of the death, mental disorder or bankruptcy orother event, be deemed to have been duly served or delivered in
respect of any Share registered in the name of such Member as sole orjoint holder unless such Member's name shall, at the time of the service
or delivery of the notice or document, have been removed from theRegister of Members as the holder of the share, and such service ordelivery shall for all purposes be deemed a sufficient service or deliveryof such notice or document on all persons interested (whether jointlywith or as claiming through or under such Member) in the share.

43.9

A notice may be given by the Company to the person or persons which
the Company has been advised are entitled to a share or shares inconsequence of the death, mental disorder, or bankruptcy or otherwiseof a Member in the same manner as other notices which are required
to be given under the Articles and shall be addressed to them by name,or by the title of representatives of the deceased, or trustee of thebankrupt, or by any like description. Upon supplying to the Company an

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APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

address within Singapore for the service of notices, such person or
persons shall be entitled to have served upon such person or persons
at such address any notice or document to which the Member would but
for such Member's death, mental disorder, bankruptcy or otherwise beentitled and such service shall for all purposes be deemed a sufficient
service of such notice or document on all persons interested (whether
jointly with or as claiming through or under him) in the share.
43.10 Notice of every general meeting shall be given in any mannerauthorised by the Articles to every holder of Shares carrying an
entitlement to receive such notice on the record date for such meeting
except that in the case of joint holders the notice shall be sufficient if
given to the joint holder first named in the Register of Members andevery person upon whom the ownership of a Share devolves by reasonof his being a legal personal representative or a trustee in bankruptcy
of a Member where the Member but for such Member's death or
bankruptcy would be entitled to receive notice of the meeting, and noother person shall be entitled to receive notices of general meetings.

44

Winding Up

44.1

If the Company shall be voluntarily wound up, the application to wind up
the Company shall, subject to Applicable Law, be made in Singapore
pursuant to the provisions of the Insolvency, Restructuring andDissolution Act 2018, No. 40 of 2018, of Singapore. If the Company
shall be involuntarily wound up, the administration of the winding-up
process shall be by the Cayman Islands court in accordance with the
Statute.

44.2

If the Company shall be wound up, the liquidator shall, subject always
to Applicable Law, apply the assets of the Company in satisfaction of
creditors' claims in such manner and order as such liquidator thinks fit.
Subject to the rights attaching to any Shares, in a winding up:(a)if the assets available for distribution amongst the Members
shall be insufficient to repay the whole of the Company's issued
share capital, such assets shall be distributed so that, as nearly
as may be, the losses shall be borne by the Members inproportion to the par value of the Shares held by them; or(b)

if the assets available for distribution amongst the Members
shall be more than sufficient to repay the whole of theCompany's issued share capital at the commencement of the

D-58

Provision 11

Provision 11

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

winding up, the surplus shall be distributed amongst theMembers in proportion to the par value of the Shares held bythem at the commencement of the winding up subject to a
deduction from those Shares in respect of which there aremonies due, of all monies payable to the Company for unpaid
calls or otherwise.
44.3

If the Company shall be wound up (whether the liquidation is voluntary,
under supervision, or by the court) the liquidator may, subject to therights attaching to any Shares and Applicable Law, and with theapproval of a Special Resolution of the Company and any otherapproval required by the Statute, divide amongst the Members in kind
the whole or any part of the assets of the Company (whether such
assets shall consist of property of the same kind or not) and may forthat purpose set such value as such liquidator deems fair upon any
assets and may determine how the division shall be carried out as
between the Members or different classes of Members. The liquidator
may, with the like approval, vest the whole or any part of such assets intrustees upon such trusts for the benefit of the Members as theliquidator, with the like approval, shall think fit, but so that no Member
shall be compelled to accept any asset upon which there is a liability.

45

Indemnity and Insurance

45.1

Subject to the rules and regulations of the Designated Stock Exchange
and/or any other competent regulatory authority or otherwise under
Applicable Law, every Director and Officer (which for the avoidance of
doubt, shall not include auditors of the Company), together with every
former Director and former Officer (each an "Indemnified Person")shall be indemnified out of the assets of the Company against any
liability, action, proceeding, claim, demand, costs, damages or
expenses, including legal expenses, whatsoever which they or any ofthem may incur as a result of any act or failure to act in carrying out theirfunctions other than such liability (if any) that they may incur by reasonof their own negligence, actual fraud, wilful default, breach of duty or
breach of trust. No Indemnified Person shall be liable to the Company
for any loss or damage incurred by the Company as a result (whether
direct or indirect) of the carrying out of their functions unless that liability
arises through the actual fraud or wilful default of such Indemnified
Person. No person shall be found to have committed negligence, actual
fraud, wilful default, breach of duty or breach of trust under this Article

D-59

Provision 11

APPENDIX D: PROPOSED NEW MEMORANDUM AND
ARTICLES OF ASSOCIATION

unless or until a court of competent jurisdiction shall have made afinding to that effect.
45.2

The Company shall advance to each Indemnified Person reasonable
attorneys' fees and other costs and expenses incurred in connection
with the defence of any action, suit, proceeding or investigation
involving such Indemnified Person for which indemnity will or could besought. In connection with any advance of any expenses hereunder, theIndemnified Person shall execute an undertaking to repay the advanced
amount to the Company if it shall be determined by final judgment orother final adjudication that such Indemnified Person was not entitled toindemnification pursuant to this Article. If it shall be determined by afinal judgment or other final adjudication that such Indemnified Person
was not entitled to indemnification with respect to such judgment, costs
or expenses, then such party shall not be indemnified with respect tosuch judgment, costs or expenses and any advancement shall be
returned to the Company (without interest) by the Indemnified Person.

45.3

The Directors, on behalf of the Company, may purchase and maintaininsurance for the benefit of any Director or Officer against any liability
which, by virtue of any rule of law, would otherwise attach to such
person in respect of any negligence, default, breach of duty or breachof trust of which such person may be guilty in relation to the Company.

46

Financial Year and Financial Statements
Unless the Directors otherwise prescribe, the financial year of theCompany shall end on 31st December in each year and, following theyear of incorporation, shall begin on 1st January in each year.

47

Transfer by Way of Continuation
If the Company is exempted as defined in the Statute, it shall, subject
to the provisions of the Statute and with the approval of a Special
Resolution, have the power to register by way of continuation as a body
corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.

48

Mergers and Consolidations
The Company shall have the power to merge or consolidate with one ormore other constituent companies (as defined in the Statute) upon suchterms as the Directors may determine and (to the extent required by the
Statute) with the approval of a Special Resolution.

D-60

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORTSTRICTLY PRIVATE AND CONFIDENTIAL

Independent Market Research on theMedia and Entertainment Industry
with a Focus on the Interactive Video
Streaming Platform, V-Liver, and Live
Commerce Industries

23rd October 2023

© 2023

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT3G:

The 3rd generation of cellular network

4G:

The 4th generation of cellular network

5G
ACG
AI
APAC
ARPU
ARPPU
Asia/Asian
AVOD
CAGR
COVID-19
DAU
DLC
FLV
GDP
HEVC IP
ICT
IP
Livers
MAU
Mbps
MENA
OTT
PC
PUGC
QC
RPG
RTMP
SaaS
SEA
SMB
SNS
SVOD
TAM
TVOD
UGC
UI
USA
V-Liver/Vliver
VOD
Vtuber
WebRTC
YoY

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The 5th generation of cellular network
Animation, comics, and games
Artificial intelligence
Asia-PacificAverage revenue per-user
Average revenue per-paying user
Philippines, Singapore, Malaysia, Thailand, Indonesia, Japan, and Taiwan
Advertising-based video-on-demand
Compound annual growth rate
Coronavirus disease 2019
Daily active user
Downloadable content
Flash video format
Gross domestic productHigh-efficiency video coding intellectual property
Information communication technology
Intellectual property
Live streamer
Monthly active user
Megabyte per-second
Middle East and North Africa
Over-the-top
Personal computer
Professionally curated user-generated content
Quality control
Role-playing gameReal-time messaging protocol
Software-as-a-Service
Philippines, Singapore, Malaysia, Thailand, and Indonesia
Small and medium-sized businessSocial networking service
Subscription video-on-demand
Total addressable market
Transactional video-on-demand
User-generated content
User interface
United States of America
Virtual Idol
Video-on-demand
Virtual YouTuberWeb real-time communication
Year-on-year

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

Table of Contents
1. MACROECONOMIC OVERVIEW FOR SELECTED COUNTRIES IN ASIA ......................................... 6
1.1.1. GROSS DOMESTIC PRODUCT (GDP) PER CAPITA ................................................................. 6
1.1.2. DEMOGRAPHIC AND SOCIOECONOMIC TRENDS .................................................................. 7
1.1.3. POPULATION AND AGE GROUP......................................................................................................... 7
1.1.4. DIGITAL INDICATORS ................................................................................................................. 9
1.1.5. SMARTPHONE USERS ...................................................................................................................... 9
1.1.6. INTERNET USERS AND PENETRATION RATE .................................................................................... 10
1.1.7. TRENDS ON PERSONAL ENTERTAINMENT SPEND AS A PROPORTION OF TOTAL INCOME
11
1.1.8. OUTLOOK—IMPACT OF COVID-19 AND SHIFT IN CONSUMER ENTERTAINMENT ............ 11
2. OVERVIEW OF ASIA MEDIA AND ENTERTAINMENT INDUSTRY................................................... 12
2.1.1. INDUSTRY DEFINITION AND SEGMENTATION ...................................................................... 122.1.2. VALUE CHAIN AND ECOSYSTEM ANALYSIS.......................................................................... 14
2.1.3. KEY TRENDS IN THE INDUSTRY ............................................................................................. 15
2.1.4. MARKET SIZING, FORECAST, AND SHARE ESTIMATES....................................................... 17
3. OVERVIEW OF INTERACTIVE VIDEO STREAMING PLATFORM MARKET.................................... 18
3.1.1. INDUSTRY OVERVIEW ............................................................................................................. 18
3.1.2. EVOLUTION OF THE INTERACTIVE VIDEO STREAMING MARKET ......................................................... 18
3.1.3. INDUSTRY VALUE CHAIN ................................................................................................................ 19
3.1.4. KEY DRIVERS................................................................................................................................ 21
3.1.5. GROWTH CHALLENGES.................................................................................................................. 24
3.1.6. KEY TRENDS ................................................................................................................................. 26
3.1.7. KEY METRICS COMPARISON .......................................................................................................... 28
3.1.8. JAPAN ........................................................................................................................................ 29
3.1.9. MARKET SIZE ................................................................................................................................ 29
3.1.10. COMPETITIVE LANDSCAPE AND MARKET SHARE ........................................................................... 30
3.1.11. OPERATIONAL PERFORMANCE ..................................................................................................... 31
3.1.12. TAIWAN.................................................................................................................................... 32
3.1.13. MARKET SIZE.............................................................................................................................. 32
3.1.14. COMPETITIVE LANDSCAPE AND MARKET SHARE ........................................................................... 33
3.1.15. OPERATIONAL PERFORMANCE ..................................................................................................... 34
3.1.16. COMPANY POSITIONING ....................................................................................................... 34
3.1.17. SALES AND MARKET STRATEGY ................................................................................................... 34
3.1.18. OPPORTUNITIES .................................................................................................................... 35
4. OVERVIEW OF INTERACTIVE VIDEO STREAMING PLATFORM MARKET IN MAJOR SOUTHEASTASIAN COUNTRIES ............................................................................................................................ 37
4.1.1. TRENDS (DRIVERS AND RESTRAINTS).................................................................................. 37
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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

4.1.2. MARKET SIZE ............................................................................................................................ 38
4.1.3. OUTLOOK .................................................................................................................................. 39
5. BRIEF OVERVIEW OF V-LIVERS LANDSCAPE ................................................................................ 40
5.1.1. INDUSTRY OVERVIEW ............................................................................................................. 40
5.1.2. DRIVERS .................................................................................................................................... 43
5.1.3. MARKET SIZE ............................................................................................................................ 44
5.1.4. DEMOGRAPHICS ...................................................................................................................... 45
5.1.5. GLOBAL OUTLOOK ................................................................................................................... 46
6. BRIEF OVERVIEW OF LIVE COMMERCE.......................................................................................... 47
6.1.1. INDUSTRY OVERVIEW ............................................................................................................. 47
6.1.2. KEY DRIVERS ............................................................................................................................ 48
6.1.3. GROWTH CHALLENGES .......................................................................................................... 49
6.1.4. MARKET SIZE ............................................................................................................................ 50
6.1.5. TRENDS ..................................................................................................................................... 52
7. SUMMARY PROSPECTS AND OUTLOOK ........................................................................................ 53
8. APPENDIX ........................................................................................................................................... 55
8.1.1. HISTORY OF LIVE COMMERCE IN CHINA............................................................................... 55

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT© October 2023 Frost & Sullivan
The market research process for this study has been undertaken through secondary/desktop research as well as primaryresearch, which involves discussing the status of the industry with leading participants and experts. The researchmethodology used is the Expert Opinion Consensus Methodology.
Quantitative market information is subject to fluctuations due to possible changes in the business and industry climate.
Frost & Sullivan’s estimates and assumptions are based on varying levels of quantitative and qualitative analyses,
including industry journals, company reports and information in the public domain.
Forecasts, estimates, predictions, and other forward-looking statements contained in this report are inherently
uncertain because of changes in factors underlying their assumptions, or events or combinations of events that cannot
be reasonably foreseen. Actual results and future events could differ materially from such forecasts, estimates,
predictions, or such statements.
This study has been prepared for 17LIVE INC. (“the Company”). No part of this study may be otherwise given, lent,
resold, or disclosed to non-customers without our written permission. Furthermore, no part may be reproduced, stored
in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, orotherwise, without our permission.
Frost & Sullivan has prepared this study in an independent and objective manner, and it has taken adequate care toensure its accuracy and completeness. We believe that this study presents a true and fair view of the industry within
the limitations of, among others, secondary statistics and primary research, and it does not purport to be exhaustive.
Our research has been conducted with an “overall industry” perspective, and it may not necessarily reflect theperformance of individual companies in the industry. Frost & Sullivan shall not be liable for any loss suffered becauseof reliance on the information contained in this study. This study should also not be considered as a recommendation
to buy or not to buy the shares of any company or companies as mentioned in it or otherwise.
Authorized Signatory

Sanjay Singh
Senior Vice President
Frost & Sullivan (S) Pte Ltd
9 Battery Rd, #15-01,
Singapore 049910

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

1

MACROECONOMIC OVERVIEW FOR SELECTED COUNTRIES IN ASIA

1.1

GROSS DOMESTIC PRODUCT (GDP) PER CAPITA

The GDP per capita for 5 selected countries in Southeast Asia (SEA) being Singapore Malaysia, Thailand,
Philippines and Indonesia as well as Japan and Taiwan (collectively ‘selected countries in Asia’ or ‘Asian’)increased from USD 154,806.7 in 2020 to USD 177,305.7 in 2022, growing at a compound annual growthrate (CAGR) of 7.0% during the period, notwithstanding the 32-year plunge of the Japanese yen’s value
against the US dollar. The opening up and growth of the other economies in the wake of the easing of
COVID-19 restrictions largely offset the yen’s decreased value. Frost & Sullivan expects this GDP growth
to moderate in the post-pandemic forecast period (2023-2027), recording a CAGR of 4.8% as consumer
confidence improves in the wake of stabilized economics.
Of the Asian countries, Singapore had the highest GDP per capita at USD 82,807.6 in 2022, followed by
Japan and Taiwan with a GDP per capita of USD 33,853.8 and USD 32,687.4, respectively. The GDP per
capita in Indonesia, Malaysia, Thailand, and the Philippines ranged between USD 3,623.6 and USD
12,465.6 in 2022.
The following chart illustrates the Asian countries’ GDP per capita from 2020 to 2027.
Figure 1-1: GDP per Capita at Current Prices in Selected Countries in Asia, 2020–2027F
120,000.0

Japan

TaiwanPhilippines

2020
40,133.0
28,571.4
3,325.8
61,274.0
10,400.2
7,169.9
3,932.32021
39,933.0
33,186.3
3,576.1
77,710.1
11,475.7
7,227.5
4,362.72022
33,853.8
32,687.4
3,623.6
82,807.6
12,465.6
7,069.6
4,798.1

Singapore

Malaysia

ThailandIndonesia

100,000.0
80,000.0
60,000.0
40,000.0
20,000.0
Japan
TaiwanPhilippines
Singapore
Malaysia
ThailandIndonesia

2023F
33,949.7
32,339.7
3,859.2
87,884.2
13,034.1
7,298.0
5,108.92024F
34,554.9
34,046.2
4,169.0
91,727.9
13,913.2
7,731.3
5,509.1

2025F
36,657.5
36,098.6
4,523.3
95,922.8
14,837.3
8,242.6
5,914.72026F
38,357.9
38,112.0
4,926.3
99,984.5
15,690.9
8,718.0
6,336.52027F
39,899.4
39,929.0
5,373.4
103,993.
16,417.4
9,185.9
6,787.2

Source: IMF World Economic Outlook 2023, Compiled by Frost & Sullivan

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1.2
1.2.1

DEMOGRAPHIC AND SOCIOECONOMIC TRENDS
Population and Age GroupThe rapidly aging population in Asian countries coupled with declining fertility rates are posing significant
challenges to the economies.
Figure 1-2: Total Population of Selected Countries in Asia in Millions, 2020–2027F
300.0

Japan

TaiwanPhillipines

2020
125.8
23.6
108.8
5.7
32.4
69.8
270.2

2021
125.5
23.4
110.2
5.5
32.6
70.0
272.2

2022
125.2
23.3
111.6
5.6
32.7
70.1
274.9

Singapore

Malaysia

ThailandIndonesia

250.0
200.0

150.0
100.0

50.0
Japan
TaiwanPhillipines
Singapore
Malaysia
ThailandIndonesia

2023F
124.6
23.3
112.9
5.7
33.1
70.2
277.4

2024F
124.0
23.3
114.2
5.7
33.5
70.3
280.0

2025F
123.4
23.3
115.4
5.7
33.9
70.3
282.5

2026F
122.8
23.3
116.6
5.7
34.2
70.4
284.9

2027F
122.1
23.3
117.8
5.8
34.6
70.4
287.3

Source: World Bank, Compiled by Frost & Sullivan

This aging population has contributed to an overall shrinking population. Experts forecast Japan’s
population, one of the oldest countries in the world with a median age of 48.6 years, is expected to decline
during the forecast period. Its 2022 population reached 125.2 million people, with individuals under 20 years
old making up approximately 11.8% of the entire population. This decrease in population size could limit
the country’s economic growth because of increasing healthcare costs and the reduced availability of young
people in the workforce. To circumvent this challenge, the government is encouraging the elderly to leadhealthier lifestyles, increasing the age of retirement, and introducing incentives to help young couples inraising children.

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Figure 1-3: Population by Age Group in Selected Countries in Asia, 2020-2027F
2020

2021

2022

2023

2024

2025

2026

2027

0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+

Japan
11.9%
58.5%
29.6%
11.8%
58.4%
29.8%
11.6%
58.5%
29.9%
11.5%
58.5%
30.1%
11.3%
58.5%
30.2%
11.2%
58.4%
30.4%
11.1%
58.4%
30.5%
11.0%
58.4%
30.7%

Taiwan
12.8%
72.0%
15.2%
12.7%
71.4%
16.0%
12.6%
70.7%
16.7%
12.6%
70.0%
17.5%
12.5%
69.3%
18.2%
12.5%
68.6%
18.9%
12.5%
67.9%
19.7%
12.4%
67.2%
20.5%

Phillipines
30.9%
63.8%
5.2%
30.6%
64.0%
5.3%
30.3%
64.2%
5.4%
30.0%
64.4%
5.6%
29.7%
64.5%
5.8%
29.4%
64.7%
6.0%
29.1%
64.8%
6.1%
28.8%
64.9%
6.3%

Singapore
12.2%
74.7%
13.2%
12.0%
73.9%
14.1%
11.8%
73.0%
15.1%
11.7%
72.2%
16.1%
11.6%
71.3%
17.1%
11.5%
70.4%
18.1%
11.4%
69.5%
19.1%
11.3%
68.6%
20.1%

Malaysia
23.3%
69.7%
7.0%
23.0%
69.8%
7.3%
22.7%
69.8%
7.5%
22.4%
69.8%
7.8%
22.2%
69.7%
8.1%
22.0%
69.6%
8.4%
21.8%
69.5%
8.7%
21.6%
69.5%
9.0%

Thailand
16.1%
70.1%
13.9%
15.8%
69.7%
14.5%
15.5%
69.3%
15.2%
15.2%
68.8%
16.0%
14.9%
68.3%
16.7%
14.6%
67.9%
17.5%
14.3%
67.4%
18.3%
14.0%
66.9%
19.0%

Indonesia
25.7%
67.6%
6.7%
25.5%
67.7%
6.8%
25.2%
67.9%
6.9%
24.9%
68.1%
7.0%
24.5%
68.2%
7.3%
24.2%
68.3%
7.5%
23.8%
68.4%
7.8%
23.5%
68.5%
8.1%

Source: UN World Population Prospect; World Bank; Compiled by Frost & Sullivan

Despite having a prominent forward looking technology industry, especially in semiconductor manufacturing,seniors still dominate Taiwan’s population. With its fertility rate declining and life expectancy rate improving,
Taiwan is now facing an aging population with a median age of 41.3 years old, and population numbers
have been shrinking since 2020.
Indonesia, the fourth-most populated country in the world and the most populous country in SEA will havean estimated population of 282.5 million by 2025, a CAGR increase of 1.0% over 2023 to 2027. Although
Indonesia’s total fertility rate has been declining, the United Nations expects the country to have a relatively
young population in upcoming years, as its median age in 2020 was an estimated 29.7 years and will
increase moderately to 31.0 years in 2025.

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1.3

DIGITAL INDICATORS

1.3.1

Smartphone Users

Smartphone penetration in Asian countries has driven economic development and reflects the growing
standard of living among the Asian diasporas. Smartphones elevate living standards by providing easy
access to information, services, and online education. They enhance communication, promote economic
empowerment through digital platforms, improve productivity with various tools, and offer essential services
in emerging markets, all contributing to a better quality of life. All Asian countries registered an increase insmartphone usage as the device became an integral part of life, especially in the wake of the COVID-19
pandemic, during which more people conducted economic transactions online. The following chart depicts
the number of smartphone users in the Asian countries from 2020 until the end of our forecast period in
2027.
Figure 1-4: Number of Smartphone Users in Millions in Selected Countries in Asia, 2020-2027F
300.0

Japan

TaiwanPhillipines

2020
77.2
16.5
42.3
5.3
17.4
38.8
193.9

2021
80.7
16.8
69.1
5.4
21.3
45.4
210.8

2022
83.8
16.3
78.5
5.6
23.1
48.7
223.8

Singapore

Malaysia

ThailandIndonesia

250.0
200.0
150.0
100.0
50.0
Japan
TaiwanPhillipines
Singapore
Malaysia
ThailandIndonesia

2023F
86.6
16.5
80.3
5.7
23.5
49.2
233.5

2024F
88.9
16.7
82.7
5.9
24.1
49.9
242.2

2025F
91.0
17.0
85.1
6.0
24.7
50.7
249.9

2026F
92.8
17.2
87.5
6.1
25.2
51.4
256.9

2027F
94.4
17.5
89.9
6.1
25.8
52.1
263.1

Source: Statista1; Interviews with selected industry participants; Frost & Sullivan

1 1Japan: Statista.(October 5, 2023). Number of smartphone users in Japan from 2019 to 2023 with a forecast until 2028 (in millions)[Graph]. In Statista. Retrieved October 19, 2023, from Japan: number of smartphone users 2028 | Statista; Taiwan: Statista. (August
14, 2023). Number of smartphone users in Taiwan 2017-2028 (in millions) [Graph]. In Statista. Retrieved October 19, 2023, from
Taiwan: number of smartphone users 2017-2028 | Statista; Phil: Statista. (September 26, 2023). Number of smartphone users in thePhilippines from 2019 to 2028 (in millions) [Graph]. In Statista. Retrieved October 19, 2023, from Smartphone users in the Philippines
2028 | Statista; Singapore: Statista. (September 12, 2023). Number of smartphone users in Singapore from 2019 to 2028 (in millions)[Graph]. In Statista. Retrieved October 19, 2023, from Singapore: smartphone users 2028 | Statista; Malaysia: Statista. (August 14,2023). Number of smartphone users in Malaysia from 2013 to 2028 (in millions) [Graph]. In Statista. Retrieved October 19, 2023, from
Malaysia: number of smartphone users 2013-2028 | Statista; Thailand: Statista. (August 14, 2023). Number of smartphone users in
Thailand from 2013 to 2028 (in millions) [Graph]. In Statista. Retrieved October 19, 2023, from Thailand: number of smartphone users
2013-2028 | Statista; Indonesia: Statista. (September 19, 2022). Number of smartphone users in Indonesia from 2018 to 2028 (inmillions) [Graph]. In Statista. Retrieved October 19, 2023, from Indonesia: smartphone users 2028 | Statista.

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1.3.2

Internet Users and Penetration Rate

Internet penetration in the Asian countries has been growing on account of rising demand and associatedefforts by the respective governments in instituting infrastructure projects to provide their populations withinternet access. The Philippines continues to have the lowest penetration, while Malaysia, Japan,
Singapore, and Taiwan have penetration rates of more than 90%. In 2021, Japan spent an estimated record
USD 2.4 billion on information and communications technology (ICT) and internet infrastructure. The focus
on digitization and improving the internet economy has resulted in a robust internet ecosystem with highspeed connectivity. Ookla2 reported Japan’s median fixed internet connection speed at 150.3 megabits per
second (mbps). According to industry sources, the country had an estimated total of 112.8 million internet
users in 2022. As of 2023, Taiwan had 22.3 million internet users, with an internet penetration rate of 93.5%
and with a median fixed internet connection at 124.4 mbps. 3
Figure 1-5: Internet Penetration Rate in Selected Countries in Asia, 2020-2027F 4
100%

Japan

TaiwanPhillipines

2020
88.3%
87.1%
49.8%
90.4%
87.7%
71.0%
73.7%

2021
90.6%
89.4%
52.8%
92.2%
91.2%
72.8%
81.9%

2022
91.0%
91.6%
55.8%
93.9%
94.5%
74.7%
90.6%

Singapore

Malaysia

ThailandIndonesia

80%
60%
40%

20%
0%
Japan
TaiwanPhillipines
Singapore
Malaysia
ThailandIndonesia

2023F
91.4%
93.5%
58.9%
95.5%
97.6%
76.5%
98.0%

2024F
91.8%
95.3%
61.9%
96.9%
98.0%
78.3%
98.0%

2025F
92.1%
97.0%
64.9%
98.0%
98.0%
80.1%
98.0%

2026F
92.3%
98.0%
67.9%
98.0%
98.0%
81.8%
98.0%

2027F
92.6%
98.0%
70.9%
98.0%
98.0%
83.4%
98.0%

Source: Statista5; Interviews with selected industry participants; Frost & Sullivan

2

Ookla, the company behind Speedtest, is the global leader in fixed broadband and mobile network testing applications, data, andanalysis.( https://www.speedtest.net/about)3
Kemp, Simon. Digital 2023:Taiwan. Digital 2023: Taiwan — DataReportal – Global Digital Insights. 13 February 2023. Date
accessed:13 July 2023.
4
Data for internet and smart phone users and penetration rates are averages and is contingent on the time of capture of this data
which may affect the consistency of such metrics across countries.
5
Internet - Japan. (n.d.). Retrieved October 23, 2023, from https://www.statista.com/outlook/co/digital-connectivityindicators/internet/japan; Internet - Taiwan. (n.d.). Retrieved October 23, 2023, from https://www.statista.com/outlook/co/digitalconnectivity-indicators/internet/taiwan; Statista. (July 25, 2023). Internet penetration rate in the Philippines from 2019 to 2028 [Graph].
In Statista. Retrieved October 23, 2023, from https://www.statista.com/statistics/975072/internet-penetration-rate-in-the-philippines/

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1.4

TRENDS ON PERSONAL ENTERTAINMENT SPEND AS A PROPORTION OF TOTALINCOMEAs each country enters the recovery phase following the pandemic, most nations are readjusting andconcentrating on returning their economies to pre-pandemic states.
On average, all countries in Asia spent less than 5% of their total income on personal entertainment during
the pandemic, with the lowest spenders among them being Indonesia and the Philippines, which spent lessthan 2% of their income on personal entertainment. As the effects of the pandemic declined and theeconomies returned to normalcy, discretionary spending improved, and Asian economies saw an uptick inpersonal entertainment expenses. For instance, Taiwan, one of the nations least affected by the pandemic,
recorded among the lowest decline (6% in 2020 versus Malaysia’s nearly 50% decline) in absoluteentertainment spending among the Asian countries. Asians continue to spend the most on shopping, andmovies/entertainment have grown in popularity, especially after the pandemic, during which all outdoor
entertainment centers closed.
Figure 1-6: Estimated Personal Entertainment Spend as a Proportion of Total Income in Selected
Countries in Asia, 2020, 2022 and 2027F
ThailandIndonesia

1.7%

4.4%

5.2%

3.9%

3.9%

3.2%

5.0%
1.3%

3.6%

2.0%

3.2%
1.2%

1.0%

5.2%

2.0%

3.4%

3.0%

4.2%

4.7%

5.0%
4.0%

Malaysia

1.9%

Singapore

5.2%

Phillipines

5.8%

Taiwan

1.9%

Japan

5.6%

6.0%

0.0%
2020

2022

2027F

Source: Industry sources; Frost & Sullivan

1.5

OUTLOOK—IMPACT OF COVID-19 AND SHIFT IN CONSUMER ENTERTAINMENTThe COVID-19 pandemic significantly impacted the interactive video streaming industry and shifted
consumer entertainment preferences, including causing a surge in viewership demand for online streaming
platforms. With people staying at home because of lockdowns and social distancing measures, more people
consumed digital content, which accelerated the shift from traditional television viewing to online streaming.
Factors such as convenience, the availability of a wide range of content, and the ability to watch on demand
have driven this shift. Furthermore, the entertainment industry adapted to the shift in consumer behavior byembracing live streaming and online platforms. Virtual concerts and live events and performances havebecome popular, allowing artists and entertainers to connect with their audiences remotely. Platforms suchas YouTube Live, 17LIVE, and TikTok are live streaming more events and performances. The interactive
video streaming industry has experienced an emergence of new platforms and technologies catering todifferent forms of content, including gaming, podcasts, and educational content. This diversification
provides consumers with a wide array of options to choose from based on their interests and preferences.
Internet - Singapore. (n.d.). Retrieved October 23, 2023, from https://www.statista.com/outlook/co/digital-connectivityindicators/internet/singapore; Statista. (July 25, 2023). Internet penetration rate in Malaysia 2013-2028 [Graph]. In Statista. Retrieved
October 23, 2023, from https://www.statista.com/statistics/975058/internet-penetration-rate-in-malaysia/; Statista. (July 25, 2023).
Internet penetration rate in Thailand 2019-2028 [Graph]. In Statista. Retrieved October 23, 2023, fromhttps://www.statista.com/statistics/975067/internet-penetration-rate-in-thailand/;https://www.statista.com/outlook/co/digitalconnectivity-indicators/internet/indonesia#internet-penetration

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Frost & Sullivan believes that, while the initial surge in growth that the industry experienced during the
pandemic has receded, many of the shifts in consumer behavior and preferences are likely to continue inthe forecast period.

2

OVERVIEW OF ASIA MEDIA AND ENTERTAINMENT INDUSTRY

2.1

INDUSTRY DEFINITION AND SEGMENTATION

Figure 2-1: Media and Entertainment Industry Definitions and Segmentation, Asia 6

Media and Entertainment

Publishing

Games

Radio

Film

Music

TV
PAY TV AND
FTA TV

VOD

SVOD,TVOD
AVOD

Live online social
entertainment

Internet
AdvertisingInteractive video
streaming
Video gamestreaming

Source: Frost & Sullivan

The following provides the definition and scope of each segment (and related sub-segments) of the media
and entertainment industry:a) Publishing: The publishing segment comprises books (including books targeting the general
consumer, educational publications, and professional books), magazines (including both consumer
magazines and trade magazines) and newspapers (including daily, weekly, and monthly
newspapers).
b) Games: The gaming segment covers mobile, personal computer (PC), and console games,
including physical discs and digital versions of the games, additional downloadable content, gaming
subscription services, and in-app purchases. The segment excludes gaming hardware or devices
themselves (i.e., mobile devices, PCs, and game consoles).
c) Radio: The radio segment includes consumer subscriptions to radio services and advertisements
by radio stations and networks.
d) Film: The film segment comprises box office sales and advertisements in cinemas. However, it
does not include digital film sales, advertisements on digital film media, merchandise related tofilms, or concessions.
e) Music: The music segment comprises physical music discs, digital music, and live music but does
not include merchandise or concessions related to music artists or other musical acts.

6
Asia, for the purpose of this IMR, includes all the countries in Asia with the exception of China, Hong Kong, Afghanistan, North Korea,
Macau, Yemen, and the European and African Nations of Russia, Turkey, Egypt, and Azerbaijan

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORTf)

TV (Pay TV and Free to Air (FTA) TV): The pay TV segment comprises basic and premium TV
channel paid subscriptions, including broadcast, network, sports, and/or professional entertainment
content, and the advertisements these channels show. The FTA TV segment refers to video content
broadcasted on FTA television networks, including advertisements.

g) Video on Demand (VOD): This segment refers to an interactive television technology that enables
users to watch long-form video content on demand, unlike video content that users consume
through traditional live linear programming. VOD services consists of 3 categories:o

Subscription VOD (SVOD): This paid model requires consumers to pay a monthly fee toaccess the broad catalog of movies and TV series offerings.

oTransactional VOD (TVOD): Also known as pay-per-view, consumers pay for the video(s)they select.

oAdvertising-based VOD (AVOD): This free model allows consumers to view video content
without paying in exchange for watching advertisements.

h) Live Online Social Entertainment: This segment refers to platforms that allow users to broadcast
live video content through the internet and is not under VOD services. Under this segment, viewers
can watch the content via their own endpoint devices. Some differentiators set this segment apartfrom VOD, such as through the inclusion of more social elements and diversified monetization
methods. This segment does not include platforms such as Facebook Live and Instagram Live, as
their genesis is in social networking platforms, and the live feature is only 1 among the many
features that are present on the main platforms. 17LIVE INC. primarily operates in this segment.
The live online social entertainment can be sub-divided into 2 categories:i)oInteractive Video Streaming: This sub-segment consists of companies that started out
offering live interactive video streaming as their main business, and it also features a virtual
gifting business model, in which viewers buy virtual gifts online and send them to theirpreferred streamer, which the streamer can then cash out at a predetermined rate.
Companies operating in this space include 17Live, Lang Live, Bigo Live, Showroom, andPococha.

oVideo Game Streaming: This sub-segment consists of companies that focus on streaming
video game content. Unlike interactive video streaming, which emphasizes the streamers
and their interaction with their audience, the entertainment content of video gamestreaming emphasizes the gameplay elements, and to a smaller extent the reactions of thevideogame streamer to the game they are playing. Notable platforms include Twitch,
Caffeine, and Mobcrush.

Internet Advertising: The Internet advertising segment comprises advertisements on online
platforms, including paid search, display, and classified advertisements

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

2.2

VALUE CHAIN AND ECOSYSTEM ANALYSISThe ensuing information explains the 6 steps that make up the media and entertainment industry value
chain and the typical business models they follow:
Figure 2-2-: Media and Entertainment Industry Value Chain and Ecosystem Analysis, Asia(a) Content
Creation(b) Content
Production(c) Content
Distribution(d) MarketingandPromotion(e) Exhibition
andBroadcasting(f) Consumption
and User
Experience

Source: Frost & Sullivana) Content Creation: Content creators, such as writers, authors, screenwriters, musicians,
filmmakers, and artists generate ideas, develop concepts, and create original content, such as
movies, TV shows, music albums, books, video games, and news articles.
b) Content Production: Once the creators develop their content, it moves into the production phase,in which production companies, studios, and recording labels engage in activities such as filming,
recording, editing, special effects, sound design, and artwork creation.
c) Content Distribution: After the production phase, publishers and distributors make the content
available to the target audience. Distribution channels vary depending on the type of media andinclude cinemas, DVD/Blu-ray sales, CD sales, and VOD and digital platforms.
d) Marketing and Promotion: When the content is available for distribution, marketing agencies,
publicists, and advertising companies create awareness and generate interest among the target
audience using many avenues, such as ad campaigns, public relations, press releases, trailers,and posters.
e) Exhibition and Broadcasting: Theaters, broadcasters, streaming platforms, and event organizers
display or broadcast content to the audience by way of activities such as theatrical screening,
television broadcasts, radio broadcasts, live concerts, and streaming on various platforms.
f) Consumption and User Experience: Finally, the audience consumes the content by attending amovie in the cinema, watching a TV show at home, listening to music on a streaming platform, or
playing a video game. User experience, accessibility, and convenience are important factors at thisstage.
Apart from the core value chain, the media and entertainment industry relies on additional revenue streams,
such as merchandising, licensing, product placements, endorsements, and sponsorships, which contributeto the overall profitability of the content and associated intellectual property.

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2.3

KEY TRENDS IN THE INDUSTRY

Demographic Shift and Social Media’s Contribution Toward the Industry
Millennials 7 account for an estimated 25%, or approximately 1.1 billion people, of Asia’s population.
Researchers refer to them as digital natives because they are the 1st generation to have grown up in aworld of digital technology. They have a comprehensive awareness of digital tools, digital literacy abilities,
and a natural aptitude for interacting with the online environment, and their exposure to and experienceswith digital technology have significantly changed the ways in which they connect with others, communicate,
work, and learn. Gen Z 8 are digital natives and have several traits in common with Millennials. This
generation lives in a time when technologies are in their most advanced stage yet, and Gen Z’s behavior
has significantly altered the way individuals perceive social media.
Both Millennials and Gen Z use social media extensively, as pioneers and fluent users, respectively. As of
July 2023, Thailand, Malaysia, The Philippines and Indonesia reported an above-average 9 time spent onsocial media, with The Philippines topping the charts at an average of 3 hours and 44 minutes of time spent
daily. According to industry experts, the country also had the largest number of social media users 10 who
were inclined to follow influencers or other experts on social media. While Millennials experienced thedevelopment of smartphones, Gen Z entered a world where people were already using mobile devices ona wide scale. The Millennials have been at the forefront of social media's explosive growth, with thisgeneration favoring platforms such as Instagram, Snapchat, and TikTok, which provide more interactive
and visual content.
Social media has significantly contributed to the media and entertainment industry’s growth and willcontinue to do so in the forecast period. Frost & Sullivan believes that social media has revolutionized themarketing methods of media and entertainment companies, the impact of influencers and live streamers
on social media, and the means by which the general population engages and perceives entertainment
content today.
Rise of the Digital Platform
Utilization of the internet in the media and entertainment industry has resulted in a significant
interdependence between the two. The internet allows multiple platforms to distribute content—including
over-the-top (OTT) services, such as VOD platforms, live streaming services, and music streaming
platforms.
The evolution of technology affects consumer behavior. Most people want ease-of-use, personalization,
and a hands-on consumer experience, which is becoming more possible as digital platforms apply the latest
technology. For instance, with artificial intelligence (AI) and machine learning, streaming services analyze
user data, such as past viewing patterns and search history, to create personalized content
recommendations, which are more likely to lead to a positive viewing experience. This strategy has helped
them boost engagement and lower churn.

7
Frost & Sullivan defines the millennial population as individuals born between 1981 and 2000 (i.e., people between the ages of 20
and 39 as of 2020).
8
Generation Z, or Gen Z, comes after Millennials and refers to those who were born between the late 1990s and the early 2010s.
9Regional average of Asian countries
10
Approximately, 40-45% of social media users aged 16 to 64 who follow influencers or other experts on social media.

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

Awareness Globally Towards the Attractiveness of the Asian Market
Companies and global consumers are becoming increasingly aware of and interested in Asia’s media andentertainment industry. With the significant possibilities of business integration and content creation in Asia,
many big players have already started building their engagement in the Asian market. Netflix and Amazon
Prime, for instance, have invested in creating more Asian-focused content, such as K-drama series andIndonesian action movies, and have introduced Asian representation in their original content.
According to industry sources, Netflix spent an approximately USD 1.9 billion on local content in APAC in
2022. With 47% of their earnings coming from Korea, Japan, India, Australia, and a few SEA nations,experts see this move as a means to capitalize on the growing demand for Asian content.
The Asian market is attracting global audiences, giving it the potential for a much stronger stance in the
global media and entertainment industry. Because of this shift toward Asian content, Frost & Sullivan
believes that a growing trend and potential for the cinema and OTT VOD industry exists in Asia, especiallyin terms of produced content.
Notwithstanding the opening of economies post the pandemic where there has been an uptick inmoviegoers and outdoor activities, Frost & Sullivan believes that the trend of watching one’s favorite icons
and stars on the various interactive video streaming platforms and OTT services will continue, as people
have grown accustomed to the convenience of viewing their chosen video any time of the day. Therefore,
the potential of outdoor entertainment is not likely to affect the OTT and interactive video streaming sectors.
Convergence of OTT Platforms
Increasingly, consumers view OTT services as mainstream market services rather than niche services andare now gravitating towards them, rather than the traditional means of consuming entertainment, becauseof the industry's growth and benefits. The emergence of numerous OTT VOD platforms has upended the
traditional entertainment market, and many traditional companies are gradually offering OTT services as
the market exhibits steady and mature growth. For instance, RCTI, one of Indonesia's largest televisioncompanies, introduced RCTI+ as a means of embracing this new kind of entertainment.
Many people have switched from traditional to OTT platforms because the latter are more engaging,personalized, and mobile-first focused. Approximately 64% of users aged between 16 and 34 and 57% ofusers aged between 35 and 45 use smartphones to access OTT services. The shift in consumer behavior
and the increasing level of internet penetration 11 in Asia are driving this growth in competition for OTT
services. The convergence and disruption of OTT services has affected a variety of media, including
television, music, radio, and movies and is likely to have a greater impact in the forecast period.
Gaming Industry and Interactive Video Streaming—The Future of Media and Entertainment
Asia has contributed significantly to the growth of video games, which has a growing addressable market
and is likely to continue to supply new players and innovative gaming concepts. Japan is well-known for its
console gaming, while South Korea is well-known for its online gaming and eSports scenes. The internet

11
Asia's internet penetration rate was approximately 64.7% in 2022, and it will continue expanding with technology advancements
during the forecast period.

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

driven gaming era is forcing traditional console behemoths to rethink their strategies, while new competitorsfrom China and SEA are also gaining traction in the global gaming market.
Frost & Sullivan is optimistic about the gaming industry's potential, especially in combination with theimmersive OTT services that platforms for live streaming video games offer. While Twitch, YouTube Live,and regional Asian streaming services, such as Nimo TV, have given new life to the gaming industry andits adjacent community, these platforms and the emergence of numerous well-funded eSport teams andcompetitions are likely to serve as catalysts for a flourishing eSports industry in SEA. Mobile gaming
breakthroughs, pioneering interactive video streaming platforms, and a strong eSports presence in Asia
can potentially contribute to the growth of Asia's media and entertainment industry.

2.4

MARKET SIZING, FORECAST, AND SHARE ESTIMATES

Driven by the aforementioned factors, the total revenue for the Asian media and entertainment industry
increased from approximately USD 189 billion in 2018 to USD 244 billion in 2022 and is expected to reach
USD 339 billion by 2027 registering a CAGR of 7% in the forecast period (2023-2027).
Figure 2-3: Market Size and Forecast of the Media and Entertainment Industry (USD billion), Asia,
2018–2027F
338.8

USD billions

350.0

315.4

300.0
250.0
200.0

244.3

229.9

188.8

201.8

203.9

2019

2020

258.8

275.3

294.4

150.0
100.0
2018

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan; Other industry sources

Figure 2-4: Market Size and Forecast of the Media and Entertainment Industry (USD billion), Asia,
2018–2027F
Year
TV
Internet Advertising
Publishing
GamingVOD
Music
CinemaLive Online Social
Entertainment
Radio
Total

2018
61.1
32.5
50.7
21.8
6.3
6.0
6.5

2019
60.6
38.6
51.5
23.3
9.6
6.3
7.1

2020
56.3
41.1
50.4
27.8
14.0
6.4
2.4

2021
59.1
50.1
52.7
31.1
19.6
7.3
3.2

2022
61.2
55.9
53.7
32.7
19.6
7.8
5.9

2023F
60.5
62.9
54.7
36.0
21.5
8.4
6.2

2024F
59.7
71.1
55.7
39.7
23.7
8.9
6.6

2025F
58.9
80.6
56.9
44.1
26.0
9.6
7.0

2026F
58.0
91.2
58.2
48.8
28.4
10.2
7.5

2027F
57.2
103.3
59.5
54.0
31.1
10.9
8.0

1.5

2.3

3.6

4.9

5.7

6.9

8.2

9.7

11.3

13.3

2.5
188.9

2.4
201.7

1.9
203.9

1.9
229.9

1.9
244.3

1.9
258.8

1.8
275.3

1.7
294.4

1.6
315.4

1.6
338.8

Source: Frost & Sullivan; Other industry sources.

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT3OVERVIEW OF INTERACTIVE VIDEO STREAMING PLATFORM MARKET

3.1

INDUSTRY OVERVIEW

3.1.1

Evolution of the Interactive Video Streaming Market

Interactive video streaming initially began on PC/desktop-based devices because of technical limitations,which primarily confined streamers to fixed, indoor locations and restricted users’ viewing experience totimes when they had access to a PC/desktop. However, technology advancement has changed this,including the availability of higher bandwidth through the implementation of 4G networks, increased
smartphone adoption, improved smartphone capabilities, and a larger number of mobile broadband users.
The emergence of mobile applications has reduced technological barriers in establishing interactive video
streaming platforms and brought greater convenience for both streamers and viewers. Interactive video
streaming platforms globally are now concentrating their efforts on enhancing their mobile applications byintroducing more interactive and engaging features and improving user interface (UI) design.
Figure 3-1: Evolution of Interactive Video Streaming Services, Early 2000s–2027
Live Broadcasting

Interactive Video Streaming

Early 2000s- UGC

2010–2014- UGC withenhanced
content
quality- Emergence ofgaming-only
live stream
platforms

2015–2018- UGC withincreased
content
diversity andmore powerfultools forcontent
control- PUGC- Strengthened
content
control andmonitoring

Access- Web-based
online access- Mobile apps
- Web-based
online access- Exponential
growth ofmobile users
with mobile
broadband- Web-based
online accessTechnology- Web-based
broadcasting
technology- Developmentof mobile
apps- Video quality
enhancement- UI
enhancement

Revenue
Streams- Advertising(e.g., ad-roll)- Emergence of
virtual gifting/reward model- Enhancementof interaction
channels andpayment
methods- Quality
control &monitoring- Beautification
tools- Virtual gifts- Subscriptions

Content

2019–2022- UGC withincreased
content
diversity andmore powerfultools forcontent control- PUGC- Alliances withfunctional
applications,such asgaming, online
shopping, andhealthcare- Mobile apps
expected to bethemainstream
while online
access iscomplementary- Augmented
reality/mixed
reality/
artificial
intelligence(especiallymachinelearning)
integration- Analytics- Virtual gifts- Subscriptions- Value-added
services

2023–2027- Increasing
popularity ofVliver segment
in interactive
video streaming
industry- Improved online
shopping
experiencethrough livecommerce
platform- Mobile apps
expected to be
the mainstream
while online
access iscomplementary- Augmented
reality/mixed
reality- Artificial
intelligence- Blockchain- Virtual gifts- Subscriptions- In-apppurchases

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Consumer
Base- Limited

GeographicalPresence- Started inWesterncountries- Millennials(especiallygamers)- Westerncountries- China- Millennials- Generation Z- All
demographics- Northeast
Asia- Southeast
Asia- NorthAmerica- Whole of Asia
- North America- Europe- Middle Eastand North
Africa- Value-added
services- Alldemographics- Whole of Asia
- North America- Europe- Middle East andNorth Africa

Source: Frost & Sullivan Analysis

3.1.2

Industry Value Chain

The interactive video streaming value chain consists of 4 steps. As the graphic below explains, each step
employs various technologies to fulfill the services and enhance users’ experience.
Figure 3-2: Interactive Video Streaming Value Chain and Ecosystem Analysis, Global, 2022

Source: Frost & Sullivan Analysis

Infrastructure: Various technologies enable the high-quality live streams that consumers experience
across multiple platforms. Multiple video streaming technologies power the entire value chain, including
streaming protocols that enable the delivery of media across the internet, codecs that convert raw video
files into shareable digital files, and content delivery networks that enable the seamless broadcast of live
stream videos. Additionally, creators employ AI and augmented reality (AR) technologies to make live edits
and enhancements to the captured video and personalized content recommendations to users.
Developments in devices such as smartphones, tablets, and microphones and the increased affordabilityof these devices have made live stream accessible to the average consumer, and the growing penetrationof smartphones and high-speed wireless internet have enabled consumers to live stream anytime,
anywhere.
(a) Content production and development: In the pure-play interactive video streaming market,
streamers generate most of the content. Popular content genres include singing, painting, and animal
streaming. Many streamers generally produce, capture, and stream from their homes. Interactive video
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streaming platform companies may provide their top streamers with the support of operational teams
to help with aspects such as image design, copywriting, business development, and market analysis todeliver high-quality content and generate revenue. Interactive video streaming platforms are
increasingly producing their own unique content programs to capture more users and market base.
(b) Content acquisition and processing: To increase user retention, interactive video stream platforms
acquire (and train) top live streamers by offering them contract agreements. To ensure that the
published content observes local laws and regulations, platforms engage in pre-screening and content
monitoring—typically leveraging AI and manual monitoring. AI-powered filter programs help to spot andfilter illegal and unfriendly content, such as obscene language and sexual content.
(c) Content distribution and delivery: Interactive video streaming platforms have built-in technologies,
such as web real-time communications and real-time messaging protocol, that enable low-latency
streaming of UGC.
(d) Content consumption: The younger population and middle-aged men with relatively higher income
levels largely make up the user base of pure-play interactive video streaming, and users generally
consume live stream content via the platform apps they have installed on their smartphones or tablets
and accessed through wireless internet connections.
Monetization: Content monetization consists of 3 distinct segments. First, the monetization process begins
with viewers of live streams who purchase virtual gifts for their preferred streamers, which the streamers
can sell back to the platforms, thereby initiating a revenue-sharing model based on a mutually agreed-uponratio. Second, interactive video streaming companies derive revenue through sale of user subscription
plans, granting users access to exclusive content and privileges in exchange for a recurring fee. Third,
platforms can effectively monetize their reach by offering digital advertising spaces to brands that align with
their target audience, thus facilitating targeted marketing opportunities.
17LIVE is mainly involved in content acquisition, processing, distribution, and delivery. It has bothcontracted and non-contracted streamers and uses both AI software and a moderation team to filter illegal
and unfriendly content. The majority of 17LIVE’s revenue comes from the sales of virtual gifts andsubscription plans.
Figure 3-3: Interactive Video Streaming Market Business Model Analysis, 2022

Source: Frost & Sullivan Analysis

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3.1.3

Key Drivers

Widespread availability of affordable internet
Since access to live streaming content requires owning a smart device and having access to affordable andstable internet services, the global availability and affordability of internet services, particularly in Taiwan
and Japan, has played a significant role in facilitating the industry’s growth. In Taiwan specifically,smartphone ownership has been increasing. According to industry sources, close to 90% of the population
owned a smartphone in 2022, and this percentage will continue to increase. Among the countries in scopeof this report, the penetration rate of smartphones in Japan is one of the highest, accounting for 91.9% in
2022.2
In addition, the availability and affordability of internet in SEA presents both opportunities and challenges.
Many countries in SEA have made significant strides to promote public access to ICT and improve internet
accessibility. In SEA, Philippines continues to have the lowest penetration, while in Malaysia and Singapore,
penetration rates exceed 90%. According to industry sources, about 20% of SEA residents still do not haveinternet access due to higher price of fixed broadband in countries such as Indonesia, the Philippines, andThailand.12 However, the region is becoming increasingly wireless through devices such as smartphones
and tablets. Smartphone penetration in SEA has been rapidly increasing and will continue to grow. Somecountries, such as Indonesia and the Philippines, report a 100% mobile penetration rate.13
Furthermore, the penetration rate of 5G technology, both in Taiwan and Japan, has grown rapidly,
increasing from 2.3% in 2020 to 19.0% in 2022 in the case of Taiwan, and increasing from 16.5% in 2020
to approximately 94.2% in 2022 in Japan, where it will reach 98% in 2023.14 This significant increase in 5G
coverage has improved network speeds, enabling users in both countries to enjoy higher-quality interactive
video streaming experiences. Additionally, the cost of mobile internet in Taiwan and Japan has become
more affordable. From 2019 to 2022, the price of 1 GB of mobile data in Taiwan significantly decreased,
and in Japan, the cost decreased approximately 15.2% from 2020 to 2022. This affordability factor plays acrucial role in making the internet more accessible in both countries, potentially leading to an expansion of
the customer base in the interactive video streaming industry.
The advancement of mobile payment
The penetration rate of mobile payment in Taiwan has experienced substantial growth, increasing from
21.6% in 2020 to 34.3% in 2022.15 The rapid 12.6% increase during a span of just 2 years represents themost rapid growth among 11 surveyed internet applications. 16 Consumers are preferring mobile payment17
options on interactive interactive video streaming platforms in Taiwan, using payment platforms, such as

12

Aaron Raj. Internet Accessibility and Affordability still a Connectivity Hurdle in Southeast Asia. Internet accessibility and affordability
still a connectivity hurdle in Southeast Asia (techwireasia.com). 7 June 2023. Accessed 13 July 2023.
13
E-ASEAN. Connecting to grow. E-ASEAN | ASEAN Investment. Accessed 13 July 2023.
2
Cabinet Office. Consumer Trends Survey. https://www.esri.cao.go.jp/jp/stat/shouhi/kekkanoyouten2022.pdf.
3
Taiwan Network Information Center. Taiwan Internet Report 2022.
https://report.twnic.tw/2022/en/assets/download/TWNIC_TaiwanInternetReport_2022_EN.pdf. n.d. For Taiwan, the penetration rateof 2020 was calculated based on the population using 5G network above 12 years old and the penetration rate of 2022 was
calculated based on the population using 5G network above 18 years old. If we adjust to the same base, it is expected that thepenetration rate of 5G will be even higher in 2022.
15
Taiwan Network Information Center. Taiwan Internet Report 2022.
https://report.twnic.tw/2022/assets/download/TWNIC_TaiwanInternetReport_2022_CH.pdf. n.d.
16
Ibid. The 11 surveyed applications include online shopping, online sales, mobile payment, crypto currency, reading e-books, online
learning, watching free videos, online games, online apps for making friends, food delivery.
17
Mobile payment refers to the use of mobile phones to make monetary purchases through a credit or debit card or through direct
debit at the bank account or debit a pre-paid wallet.

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Neweb Pay and MyCard. Notably, more than 70% of people in the 30–39 age bracket uses mobile payment
services, which gives them a sense of familiarity when paying through the live streaming application.18
Japan experienced similar adoption of mobile payments, with PayPay dominating the mobile payment
market, followed by RakutenPay and D-harai. The usage of mobile payments has increased from 34.4% in
December 2019 to 51.8% in February 2022 and is likely to reach 80% in 2023. Nearly 75% of Gen Z haveadopted mobile payments, which is 5% more than Millennials. Such high adoption rates are a significant
impetus for the interactive video streaming industry in these countries.19
Similarly, SEA is experiencing an increase in real-time digital payments. In countries such as Singapore
and Malaysia, the volume of real-time online payments is likely to increase significantly in 2024.20 Mobile
payment wallets have become a vital part of the SEA consumer landscape. According to industry sources,
consumers in Indonesia prefer platforms such as GoPay, Dana, and Ovo, while in Malaysia, Touch’nGo
and Grabpay dominate. Frost & Sullivan believes the increase in online payments is significantly impacting
the interactive video streaming industry, facilitating its growth and expanding opportunities for content
creators to monetize their broadcasts.
The growing disposable income and spending in SEA
According to OECD, SEA’s economy is expected to grow by 4.6% in 2023 and 4.8% in 2024. 21 This growth
can contribute to higher disposable incomes, giving individuals more funds to spend on entertainment andleisure, including live streaming. The increase in disposable income is also likely to lead to more consumer
spending on virtual gifts, donations, and subscription services on these platforms, directly benefiting live
streamers and platforms alike. The projected growth in the region's economy, coupled with the popularityof gaming and eCommerce, supports the potential for the interactive video streaming industry to thrive in
SEA.
Improvements in the quality of live streaming because of technological advancements
Technological advancements, including the emergence of 5G, AI, and the metaverse, have significantly
contributed to the enhancement of live streaming quality. For instance, the improved network capabilities
that 5G has facilitated, coupled with the implementation of edge computing, have reduced latency, thereby
elevating the overall quality of live streaming experiences. Additionally, the adoption of High-Efficiency
Video Coding Intellectual Property bonding technology has enabled high-quality video coverage during live
events.
Moreover, these technological advancements have improved video quality and made solutions moreaccessible by reducing their implementation costs. AI, machine learning, and deep learning technologies
have played a crucial role in enhancing content-filtering efficiency. Platforms can leverage thesetechnologies to identify and filter out inappropriate content, such as sexual or terrorist-related materials. AI
has enabled live stream applications to efficiently analyze users’ viewing history round-the-clock to provide
personalized content recommendations, improving user retention.
Furthermore, AR and virtual reality (VR) technologies have increased interactivity and immersion in live
streaming. Viewers and live streamers may utilize various filters, and multiple on-site VR panoramic
cameras allow remote audiences to experience the real environment of the venue, without any blind spots,
and independently select their preferred viewing angles. Overall, advancements in technologies, such as
18

Ibid.
Soumu. https://www.soumu.go.jp/main_content/000724576.pdf
20
Finfan. The rise of real-time digital payments in Southeast Asia. The rise of real-time digital payments in Southeast Asia (finfan.vn).
Date accessed: 13 July 2023.
21
OECD. Economic Outlook for Southeast Asia, China and India 2023. Overview-Economic-Outlook-Southeast-Asia-China-India.pdf(oecd.org). 2023.
19

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5G, AI, and the metaverse, have significantly improved the quality, accessibility, interactivity, and immersionof live streaming, enhancing viewers and live streamers experiences and capabilities.
Increasing variety of entertainment programs and better interactive video streaming platforms
The availability of a diverse range of entertainment content has significantly contributed to the attractivenessand therefore, the expansion of interactive video streaming platforms. These platforms offer a wide arrayof content, including live chat shows, music performances, gaming streams, and cooking shows. Thisvariety caters to different interests and preferences, attracting a larger audience base. By offering an
extensive selection of entertainment programs, interactive video streaming platforms can capture theattention of various demographics and engage viewers for longer durations. In addition, interactive video
streaming platforms have increasingly developing their own in-house content, as opposed to relying on
UGC alone, to draw viewership and enhance user retention. For instance, leading pure-play in interactive
video streaming companies are commonly hosting and producing live music shows and/or competitions.
Culture of fandom in Japan and growing popularity of Vlivers
The Japanese fandom culture holds a unique and prominent place, particularly when it comes to anime,
manga, games, and related media. Japanese fans exhibit a deep passion and devotion toward their favorite
franchises, characters, and idols. This fervent fandom culture extends beyond mere appreciation and has
evolved into an immersive subculture that involves cosplay (the practice of dressing up as anime
characters), fan art, fanfiction, merchandise collection, and attending conventions or events. Anime
conventions and events have become popular gathering places for fans to celebrate their favorite shows,cosplay as their beloved characters, and engage in different anime-related activities. These events provide
opportunities for fans to interact, share their love for anime, and showcase their creative talents. In East
Asia, anime is the second-most in-demand genre, behind only the superhero category and just ahead ofscience fiction. Within the region, the popularity of anime is not the same everywhere. Predictably, it is mostpopular in East Asia, followed by SEA. The impact of anime extends beyond entertainment. For example,
to a certain extent, the influence of anime is evident in various aspects of SEA society namely fashion
trends, art, and even tourism.
The intersection of the well-established fandom culture surrounding anime, manga, games, and similarinterests with the emergence of Vlivers presents notable advantages. Fans seek to engage with their
beloved characters or games and desire interaction with fellow enthusiasts. Fans strongly desire others torecognize them as devoted members within the community. The introduction of Vlivers in this context brings
significant benefits. Being digital entities, Vlivers possess an inherent longevity that is advantageous bothfor the companies and the fans themselves. This is especially so for Vlivers that are managed by companies,
as fans need not worry about their idol retiring or any unforeseen circumstances that could alter theirperception or connection, because even if the person behind the Vlivers retires, the company that holds therights to the idol can replace the voice artist behind it. This perpetual availability and stability provide asense of reassurance and continuity for fans, ensuring an enduring bond with their Vlivers and theassociated fandom culture.

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3.1.4

Growth Challenges

Concerns about AI and privacy protection
Concerns surrounding AI and privacy protection pose significant challenges to the interactive video
streaming industry. Users are wary of platforms mishandling their personal data or sharing it without theirconsent. Additionally, the use of AI algorithms for content filtering and moderation raises questions about
censorship and the risk of algorithmic bias. Security vulnerabilities and the lack of transparency in AI
decision-making exacerbate these concerns. To overcome these restraints, interactive video streaming
platforms must prioritize privacy protection, transparency, and ethical AI use by implementing robust data
privacy policies, addressing algorithmic biases, and enhancing security measures. Building trust andensuring user confidence in data handling and content moderation are vital for the industry’s growth andsustainability.
Decreasing screen time and declining entertainment expenditure post COVID-19
TaiwanThe interactive video streaming industry experienced significant growth during the COVID-19 pandemic
and social distancing restrictions, as people sought digital content and services amidst limited outdoor
activities. According to industry sources, the global number of hours people spent watching live streams
greatly increased between 2019 and 2020. However, with the pandemic wearing out, people are gradually
returning to physical activities and spending less time consuming digital content, including interactive video
streaming. Daily internet usage has decreased from 2022 levels, indicating a potential decline in live
streaming consumption. Additionally, the economic disruptions from the pandemic have significantly
decreased Taiwanese households’ expenditure on entertainment. The share of recreation, culture, andeducation in household expenditure dropped from 9.53% in 2019 to 6.43% in 2021, with spending
decreasing from NTD 77,322 to NTD 54,700.22 This decline in entertainment expenditure poses a challenge
to the revenue sustainability of interactive video streaming platforms, as it may affect viewer gifting andsubscription fees. As a result, interactive video streaming platforms may face constraints in their revenue
growth and long-term viability.
Japan
The outbreak of the COVID-19 pandemic hindered one’s ability to attend physical events and seek
traditional forms of entertainment, such as nightlife activities, social gathering, and outdoor sports events.
As a result, individuals in Japan turned to virtual entertainment alternatives to fulfill their leisure needs,
leading to an increase in the number of users and a higher penetration rate of live streaming users.
According to Frost & Sullivan, the market experienced a year-on-year (YoY) growth rate of approximately
55% on average between 2019 and 2022. However, it is worth noting that the pace of growth will moderate
during the forecasted period. While the pandemic created favorable conditions for the interactive video
streaming market’s rapid expansion, Frost & Sullivan anticipates that the YoY growth rate will stabilize at
approximately 23% between 2023 and 2027. Despite this moderation, the market size remains substantial,
underscoring its’ resilience and long-term potential.

22

National Statistics, Republic of China (Taiwan)

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SEA
Screen time in SEA, as in other parts of the world, saw a surge during the pandemic because of various
factors, such as remote work, online education, and limited opportunities for social interaction. People spentincreased amounts of time on their screens for entertainment purposes, including watching movies, playing
video games, using social media, and live streaming. According to an industry survey in Singapore, out of
the list of common pandemic leisure activities, Singaporeans intend to reduce spending on video streaming
services along with online shopping and online gaming. 23 Thailand reflects a similar scenario, where theresumption of normalcy following the pandemic has led to a decrease in internet usage and online
purchases among local internet users. Frost & Sullivan believes that the influence of the COVID-19
pandemic on online viewership and spending in SEA overall will decrease as the region moves closer to astate of normalcy and gradually returns to pre-pandemic patterns.
Platforms need to find ways to stand out given heightened competition and saturated market
conditions
Heightened competition and a saturated market pose significant restraints for the interactive video
streaming industry, necessitating platforms to find innovative ways to stand out. As more platforms enter
the market, the competition intensifies and fragments the audience base. With numerous platforms vying
for viewer attention, it becomes challenging to capture and retain a substantial user base. To overcome
these restraints, interactive video streaming platforms must seek innovative strategies to differentiatethemselves. This can include offering unique and exclusive content, implementing novel features orinteractive experiences, fostering a vibrant community, or targeting niche audiences. Platforms need tocontinuously adapt and evolve to stay relevant in a highly competitive environment and stand out from thesaturated market.
In Taiwan, a trend exists among interactive video streaming platforms to recruit top live streamers from one
another by offering more competitive salary packages. However, the sustainability of the high revenue bothlive streamers and platforms generate is questionable as the market returns to normalcy from the peak
lockdown stages. As a reference, according to the China Association of Performing Arts, Mainland China
has approximately 24,000 multi-channel network (MCN) companies, a number that has remained relatively
stable since 2021. However, more than 30% of these companies reported a decrease in profitability in
2022. 24 Additionally, the annual revenue of prominent Chinese platforms, such as Huya and Douyu,
experienced a significant drop of 20%–30% in 2022 compared to 2021. 25 This decline is reflected in theearnings of top Chinese live streamers, who used to earn in excess of tens of millions of RMB per year in2020 and 2021 but earned only 1 to 2 million RMB in 2022, representing just one-tenth of their previous
revenue during the COVID-19 pandemic.26
The Japanese interactive video streaming market is competitive and platforms such as 17LIVE, Pococha,
and Showroom are vying for users’ attention, and standing out and attracting a large user base can bechallenging because of limited differentiation in features and content. Pococha’s successful strategy
involves assigning ranks to live streamers, incentivizing popular streamers to use the platform and attract
more viewers. This unique revenue-sharing model helps platforms tap into the influence of top streamersand drive user engagement.

23
Adobo magazine. Insight: Singaporeans’ spending on leisure expected to increase despite inflation, shifting away from pandemic
activities. Insight: Singaporeans’ spending on leisure expected to increase despite inflation, shifting away from pandemic activities adobo Magazine Online. 11 May 2022. Accessed: 14 July 2023.
24
China Association of Performing Arts. Report on the Development of China's Online Performance (Live Streaming and Short Videos)
Industry (2022-2023). ѝഭ㖁㔌㺘╄˄ⴤ᫝о⸝㿶仁˅㹼ъਁኅᣕ੺.pdf (capa.com.cn). 30 May 2023.
25
Ibid.
26
Industry sources

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3.1.5

Key Trends

Virtual streamers phenomenon
Virtual streamers, known as Vtubers (virtual YouTubers), have become a prominent phenomenon in thestreaming industry. Kizuna AI, often regarded as the first Vtuber, gained significant recognition after startingher virtual streaming journey in 2016. With more than 4 million subscribers across various channels, she
has played a pivotal role in popularizing the Vtuber concept. Vtubers can similarly engage in various
activities, such as gaming, cooking sessions, song performances, and interactive Q&A sessions with theirfans. They have garnered a substantial following on video sharing and social media platforms, withdedicated fan bases and corporate sponsorships. This emerging trend has captured the attention ofcompanies in Japan and China, leading to investments in the creation and management of these virtual
influencers.27
While the market for virtual streamers in Taiwan is still in its early stages, it shows promising growth potential,
especially among Gen Z. The widespread popularity of anime in Taiwan, coupled with the establishment of
the Taiwan Vtuber Association, indicates a growing interest in Vtubers. In contrast, virtual streamers arevery popular in Japan because of a variety of factors, such as the possibility of not showing their faces andthe option of choosing an ideal visual. VLivers make up a large part of the interactive video streaming
market in Japan and present the fastest-growing trend in the industry.
Frost & Sullivan believes that as this trend continues to gain traction, virtual streamers are likely to become
more prevalent in both Taiwan’s and Japan’s streaming landscape, attracting a dedicated fan base andpotentially leading to developments in the industry.
AI-generated streamers
The progress of AI technology has enabled the emergence of AI streamers representing a notableadvancement within the virtual streamers segment. Unlike human-backed virtual streamers, AI andmachine learning algorithms power AI streamers, eliminating the need for human involvement in their live
streams. Prominent examples of AI streamers on platforms such as Twitch include Neoro-sama, the AI
Seinfeld Show, and the Athene AI Show. Live interactions with AI streamers tend to be relatively restricted
for now because of the limitations of technology. However, with AI technology developing so quickly, thequality and capabilities of AI streamers is expected to catch up with those of human-backed virtual
streamers in the forecast period. As AI algorithms continue to advance, the potential for more engaging andinteractive experiences with AI streamers is expected to increase.
Success of nagesen gifting in Japan
Japanese users tend to engage in gifting practices and often expect some form of reciprocity as a gestureof appreciation. They may communicate directly with content creators (referred to as a liver) and makespecific requests. In Japan, numerous apps and services offer gifting capabilities within interactive video
streaming platforms. For example, YouTube’s live streaming feature, YouTube LIVE, enables users to give
gifts to streamers using the Super Chat feature. Other popular interactive video streaming apps with gifting
features include 17LIVE, TwitCasting, Showroom, and NicoNico Live.28
According to industry experts, a small percentage (close to 5%) of viewers have given gifting money(nagesen) to the streamers while a majority watched without ever gifting during live streaming. Most of
those people have gifted between 100 yen and 300 yen in a single instance. Approximately 20% of people
27

City University of Hong Kong. More Kawaii than a Real-Person Live Streamer: Understanding How the Otaku Community Engages
with and Perceives Virtual YouTubers. https://www.cs.cityu.edu.hk/~zhiconlu/assets/pdf/CHI2021Vtuber.pdf. May 2021.
28
Business Insider. TikTok ǡ ǹ Ǚ Ȁ 㺀 ᣅ ǧ 䣝 㺁 ₏ 㜭 ȧ 2021 ᒤ Ǡ Ȟ 䮻 ࿻ Ǆ ɱ Ȭ ɞ 䝽 ؑ 㘵 ȃ ৾ ⳺ ॆ ‫ ݳ‬ᒤ Ȁ ˛ .
https://www.businessinsider.jp/post-225576.

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

chose 500 yen to 1,000 yen, and a smaller group of people gave between 1 yen and 100 yen. On thecontrary, approximately 5% of the gifting population gifted more than 10,000 yen. The most common
platform that users mentioned that practiced gifting was YouTube, followed by 17LIVE, TwitCasting, andShowroom.
Otaku and Hikikomori population’s affinity with interactive video streaming
The Ministry of Health, Labor, and Welfare of Japan recognizes Shakaiteki hikikomori, known as social
withdrawal, as a condition in which an individual voluntarily isolates himself within his home for a durationof more than six months and refrains from participating in social activities, such as attending school or work.
Notably, this condition does not involve psychosis, which refers to a severe mental disorder affecting an
individual’s thoughts, emotions, and perception of reality. Instead, feelings of social anxiety, introversion,or other factors lead individuals to retreat from society and limit their interactions with the outside world. 29
According to estimates, the number of individuals who fall under the broader definition of hikikomori inJapan, which includes those who primarily stay at home but venture out for errands related to their hobbies,
is approximately 696,000 nationwide.30
An otaku is typically a young individual who displays a strong interest and extensive knowledge in subjects
such as anime, manga, video games, and related fandoms. An otaku is passionate about a broad range of
popular culture, not just fixated on computers or computer games. Some otaku may find it challenging toengage in face-to-face interactions and socialize with others in real life, preferring online communities.31
However, not all otaku share this difficulty. Some otaku possess well-developed social skills and actively
participate in both virtual and real-life communities related to their interests. While some individuals identify
themselves as both otaku and hikikomori because of shared social difficulties, the terms describe distinct
aspects of behavior and do not necessarily go hand in hand. Otaku may have social difficulties, such as
finding it challenging to engage in face-to-face interactions; however, it is not a defining characteristic of
being an otaku. Many otaku actively participate in fan communities, attend conventions, and engage in bothonline and offline interactions related to their interests.
The engagement of otaku and hikikomori individuals presents opportunities for the interactive video
streaming industry. Their targeted interests and dedicated engagement make them a valuable audience for
specialized content. Interactive video streaming platforms can provide a space for them to gather, interact,and foster a sense of belonging within the community. The online accessibility of live streaming
accommodates their preference for virtual interactions, while the inclusion of Vlivers and charactersenhances their connection and immersion. By recognizing and catering to their interests, the live stream
industry can tap into a passionate and engaged viewer base, contributing to growth and community-building.

29

Saito K. Hikikomori no hyouka: shien ni kansuru gaidorain. Tokyo: Japan's Ministry of Health, Labour and Welfare, 2010.
Japanese Cabinet. ㅜ 2 ㇰ 㤕ᒤ❑ᾝ㘵ˈɝɲόɇόˈȇǢǨ.
ȟ.https://www8.cao.go.jp/youth/whitepaper/h25honpen/b1_04_02.html
31
Cambridge Dictionary. Otaku. https://dictionary.cambridge.org/pt/dicionario/ingles/otaku
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3.1.6

Key Metrics Comparison

TaiwanAccording to a survey conducted by the Taiwan Network Information Center, 77% of Taiwanese internet
users watch live streams and online videos or listen to music during their time on the internet. In addition,
56.6% of Taiwanese internet users indicated live stream as one of their online entertainment activities.
Among them, 61.3% are male and 51.6% are female.32 Live streaming is most popular among people aged
15 to 19 and 35 to 39 where 64.7% and 62.4% of respondents in the respective age groups watch live
streaming.
Japan
According to industry sources, nearly half of Japanese netizens watch live stream videos, and it is mostpopular among people aged between 20 and 30, as more than 60% of such internet users in that age groupwere inclined to watch live streaming videos as of 2022. Industry experts opine that nearly one-fifth ofJapanese internet users have experience as live streamers, making this social activity significantly popularamong all age-groups, especially among Gen Zs.
China
China has a large interactive video streaming market with stable growth. The amount of live stream users
in China reached 751 million, accounting for 70.3% of Chinese netizens as of December 2022, a 7%
increase compared to December 2021.33

32

Taiwan Network Information Center. Taiwan Internet Report 2020. https://www.twnic.tw/doc/twrp/202012e.pdf . n.d.
China Internet Network Information Center. The 51st Statistical Report on China's Internet Development.
https://cnnic.cn/NMediaFile/2023/0322/MAIN16794576367190GBA2HA1KQ.pdf . Mar 2023.
33

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3.2
3.2.1

JAPAN
Market Size

The interactive video streaming market in Japan has witnessed significant growth, attaining a market sizeof approximately USD 1.8 billion in 2022. One of the primary drivers of this expansion is the increasing
popularity of virtual live streaming. Vlivers, with their immersive and interactive experiences, played a pivotal
role in generating approximately 34.4% of the total market size in 2022.
Figure 3-4: Revenue Forecast of Interactive Video Streaming Segments (USD million), Japan, 20182027F
6000
5052.4(USD millions)

5000
4171.84000

3435.02802.33000

2278.41832.02000

1000

1418.81010.9
329.0

582.7

0
2018

2019

2020

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s
desktop research on sources including but not limited to databases of industry associations, trade bodies, and government
agencies.

The interactive video streaming market in Japan is expected to continue to grow at a CAGR of 22.0% from2023 to 2027, albeit at a gradually decelerating pace. From 2023 to 2025, the expansion of virtual live
streaming is expected to drive market growth at a CAGR of 22.0%. This immersive and interactive form ofcontent consumption is likely to attract a growing audience and stimulate market expansion. In thesubsequent years of 2026 and 2027, the growth rate is likely to stabilize at 21%, indicating a natural
progression toward market maturity and reaching saturation points in certain segments. Frost & Sullivan
believes that this underscores the persistent demand for interactive video streaming services in Japan,
suggesting potential opportunities for market development.

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3.2.2

Competitive Landscape and Market ShareIn the Japanese market, the leading platforms in terms of revenue within the interactive video streaming
sector include YouTube, 17LIVE, Pococha, Showroom, Twitcasting, WhoWatch, and Bigo Live. As of 2022,
17LIVE was one of the market leaders, with a market share of 13.7% by revenue. Since entering theJapanese market in August 2017, 17LIVE has experienced consistent YoY growth, surpassing Showroom
to secure its position. When considering virtual livers’ revenue (Figure 3-5a), YouTube Live led the market
in 2022, capturing 33.8% of the market share, because it has adopted a live streaming video system withaccessible entry requirements, attracting prominent companies, particularly those managing Vlivers, since
its start in Japan in 2011. DeNA owns the 3rd- and 5th-largest players, Pococha (with a market share of
11.7%) and Showroom (with a market share of 5.6%). Showroom has consistently reported low YoY
revenue growth since it launched in 2015, whereas Pococha has established itself in the market since its
entry in January 2017.
Twitch and Bigo enjoy market shares of 10.4% and 5.1%, respectively. Twitch, a platform that mainly
focuses on game livestreaming, is still growing in Japan since it started in 2017. Bigo Live, originating fromSingapore, entered the Japanese market in early 2016 and localized its content specifically for Japan in
2018. WhoWatch, which launched in 2015 and operates exclusively in Japan, accounted for 3.5% of themarket share in 2022, and other smaller players collectively accounted for 12.7% of the market share in
2022. Notably, the aggregate value excludes TikTok revenue from the overall market sizing.
Figure 3-5a: Market Share by Revenue, Interactive Video Streaming Market, Japan, 2022E
Others
12.7%

Twitcasting
3.4%

YouTube (Live
Streaming)
33.8%

WhoWatch
3.5%

Bigo Live
5.1%
Showroom
5.6%
17Live
13.7%

Twitch10.4%
Pococha11.7%
Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note:
1.

Frost & Sullivan’s estimated market players’ revenue based on 1) Mobile applications’ estimated gross revenue and overall
industry observation of interactive video streaming market, 2) Quarterly financial reporting by public listed companies, 3)Company disclosure. The interactive video streaming market estimates for Japan include Vliver.

2.

In the 3-5a chart, out of YouTube’s 33.8% market share, only approximately 20% corresponds to pure-play live streaming, while
the other 80% is composed of virtual live.

3.

The Others category includes smaller apps that provide only interactive video streaming and do not account for more than 5%of the market share. This includes (but is not limited to Hakuna Live, MixChannel, LiveDreamer, ࣐ࢩ࢙ LIVE, 21Live, and LiveMe.

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Nevertheless, when considering only pure-play interactive video streaming (which disregards the Vlivers
segment, as presented in Figure 3-5b), YouTube is not considered 34 as a player in the market, leaving
17LIVE as the top provider with 20.8% of the market share.
Figure 3-5b: Market Share by Revenue, Pure-Play Interactive Video Streaming Market, Japan, 2022E
Others19.2%

17Live20.8%

Twitcasting
5.2%
WhoWatch
5.3%

Pococha17.7%

Bigo Live
7.7%
Showroom
8.5%

Twitch15.7%

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Notes:
1. Frost & Sullivan’s estimated market players’ revenue based on 1) Mobile applications’ estimated gross revenue and overall
industry observation of interactive video streaming market, 2) Quarterly financial reporting by public listed companies, 3)Company disclosure. The interactive video stream market estimates for Japan include Vliver.
2. In the 3-5b chart, only pure-play revenue was considered, YouTube is excluded from this analysis.
3. The Others category refers to smaller apps that only provide interactive video streaming and do not account for more than 5%of the market share. This includes (but is not limited to) Hakuna Live, MixChannel, LiveDreamer, ɦȿȯ LIVE, 21Live, and Live
Me.

3.2.3

Operational Performance

Among the pure-play interactive video streaming companies, 17LIVE led in revenue and operational
performance35, showcasing a strong gross profit margin, average revenue per user (ARPU), and averageview duration per daily active user (DAU). However, in the overall interactive video streaming landscape,which includes virtual live streaming, YouTube outperforms 17LIVE.
Figure 3-6: Operational Performance for Select Apps, Japan, 2022E
Metrics/App Names

17LIVE

PocochaShowroom

MAU
Gross Profit Margin (%)
Est. ARPPU (USD)
Est. ARPU (USD)
Average View Duration
per DAU (minutes)

350,000
41.6
301.0
59.9

301,311.8
28-32
210-23059.4

144,306.4
26-30
190-220
59.2

YouTube(overall interactive
video streaming)>1,050,000.0
40.0
406.4
49.1

106.0

100.9

92.7

150.0

YouTube(Without
VLiver)~215,000
28%-32%285-32547.9
40-50

Source: Frost & Sullivan’s primary interviews, desktop research and analysis
Note: Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s desktop
research on sources including but not limited to databases of industry associations, trade bodies, and government agencies.

34

Virtual livers provide most of YouTube’s live streaming revenue, which explains why their revenue is so much lower when this areaof the market is disregarded (Figure 3-5b).
Operational Performance for the purpose of this report comprises MAU Gross Profit Margin, ARPU, ARPPU, Average View Duration
per DAU (in minutes)

35

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3.3

TAIWAN

3.3.1

Market Size

According to Frost & Sullivan’s market forecast, the interactive video streaming segment registered a CAGR
of 17.7% between 2018 and 2022 reaching a market size of USD 322.7 million in 2022. Going forward, themarket is expected to grow at a CAGR of 11.2% reaching a market size of USD 556.1 million in 2027. The
introduction of new segments such as new content and services, to attract and retain viewers strongly
fueled this growth in the pandemic years. However, the market also faced new challenges during the
pandemic, such as the competition for screentime from other modes of entertainment, including OTT
streaming services. Additionally, Taiwan is expected to be a mature market in the interactive video
streaming segment in the forecast period resulting in a slower and normalized growth rate. Hence, its
earning potential will remain strong but without the same levels of growth as in the late 2010s 36. Frost &Sullivan estimates that with the growth of the market and the introduction of new technologies and trends,
such as the use of Vlivers, the DAU of interactive video streaming platforms will reach 300,000 by the endof the forecast period.
Figure 3-7: Estimated Revenue Forecast of Interactive Pure-Play Interactive Video Streaming
Segments (USD million), Taiwan, 2018-2027F

600

556.1
503.0

(USD millions)

453.4
406.8
400

200

322.7

168.0

208.8

245.8

363.3

280.5

0
2018

2019

2020

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note:
1.

2.

Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and otherpresentation materials including but not limited to news articles, press releases, and publicly available industry data; (iii)
Frost & Sullivan’s desktop research on sources including but not limited to databases of industry associations, tradebodies, and government agencies.
The market size does not include Vlivers live streaming as it remains a nascent market in Taiwan.

36

Interactive video streaming began to grow rapidly in the mid-2010s with the launch of homegrown interactive video streaming
company 17Live in 2015 and other companies, such as Lang Live, UpLive, and Bigo Live, which make up the crucial players in theinteractive live video streaming market in Taiwan.

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3.3.2

Competitive Landscape and Market Share

Taiwan's top interactive video streaming apps include 17LIVE, Lang Live, UpLive, and Bigo Live. The
market also consists of smaller players, such as True Love Live, 1024 Live, and PD Live. As of 2022,
17LIVE commanded 26.9% market share by revenue in Taiwan. Since its launch in 2015, 17LIVE has
maintained its position as one of the top two leading companies in the Taiwanese interactive video
streaming market. Together with Lang Live, the Company owns more than half of Taiwan’s interactive video
stream market. 17LIVE further solidified its position by acquiring MeMeLive in 2019. Lang Live, anotherTaiwanese company that was launched in 2016 and owned 29.7% of the market share. Lang Inc. acquired
Lang Live in 2020, bolstering its presence in the market. UpLive, which began operations in China in 2016
and swiftly entered Taiwan in the same year, was the 3rd-largest with a 10.8% market share. Bigo Live,
which started its operations in Singapore and launched in Taiwan, Hong Kong, and Macau in late 2016,
occupied 8.3% of the market share in Taiwan, coming in at 4th place.
Figure 3-8: Estimated Market Share by Revenue, Pure-Play Interactive Video Streaming Market,
Taiwan, 2022E
Others24.3%

Lang Live
29.7%

Bigo Live
8.3%

17Live
UpLive26.9%
10.8%
Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note: Frost & Sullivan’s estimated market players’ revenue based on 1) mobile applications estimated gross revenue and overall
industry observation of the interactive video streaming market, 2) Quarterly financial reporting of publicly listed companies, andcompany disclosures 3) The market share allocation does not include Vlivers live streaming as it remains a nascent market in
Taiwan. 4) For both leading companies, 17Live and Lang Live, the reported revenues used for the calculation of respective market
shares are predominantly derived from their pure-play interactive video streaming services in Taiwan; i.e. at least 98% of thereported revenues consist of pure-play live stream revenue.

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3.3.3

Operational Performance

Among the major players in Taiwan’s pure-play interactive video streaming market, 17LIVE and Lang Livedominate the market with a combined market share of 56.6% in 2022. These 2 market leaders outperformtheir competitors, UpLive and Bigo Live, in all selected operational metrics (Figure 3-9). Even though Lang
Live has a higher MAU and average view duration per DAU than 17LIVE, the latter has a more effective
monetization strategy and more paying users, outperforming Lang Live in terms of ARPPU and ARPU.
Figure 3-9: Operational Performance for Select Apps, Taiwan, 2022E
Metrics/ App Names

17LIVE

Lang Live

UpLiveBigo LiveMAU

114,000.0

192,480.0

57,744.0

38,496.0

Gross Profit Margin (%)
Est. ARPPU (USD)
Est. ARPU (USD)
Average View Duration
per DAU (minutes)

19.9
350.0
63.3

28.0
260.3
41.4

<401
96.9
50.1

<37.61
<4521
58.2

81.0

130.0

120.0

NA

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note: 1. Figures denote overall Company numbers. Geographical split pertaining to Taiwan was not available as on date of thisreport preparation. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports andother presentation materials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost& Sullivan’s desktop research on sources including but not limited to databases of industry associations, trade bodies, government
agencies, such as National Development Council (Taiwan), Taiwan Statistical Data Book.

3.4

COMPANY POSITIONING37

3.4.1

Sales and Market Strategy

Japan
17LIVE's strategy for the Japanese market comprises initiatives in various areas. It aims to establish itself
as a prominent Vtuber agency by focusing on Vlivers management, collaborating with establishedcompanies, and nurturing talented V-Livers. This new strategy means that 17LIVE is likely to be the 1st
virtual live platform to manage Vlivers among the players in this report. The company plans to develop
Vliver-related products, incorporating technological advancements and expanding its content portfolio.
Additionally, it is venturing into mobile game development and recognizing the potential of interactive games
that allow users and streamers to play together. The company also integrates live commerce into its
platform, providing an alternative revenue option for streamers and enabling SMB merchants and major
brands to tap into their user base. Furthermore, the company organizes diverse offline events to foster
engagement, support streamers' growth, and create immersive user experiences. It also invests in cuttingedge streaming technology to develop its own technology to optimize the user experience and focus on
talent acquisition and management, training programs for streamers, and in-person gatherings to support
community building. With a focus on customer retention, 17LIVE provides personalized services, incentives,and loyalty programs to enhance user satisfaction.
Streamers generate revenue through virtual gifting and subscriptions, and the company organizes offline
events and festivals for streamers to interact with their fans. Through these initiatives and dedication toquality content, 17LIVE aims to establish a strong presence in the virtual entertainment industry in Japan
while prioritizing user satisfaction, streamer growth, and innovative streaming technology. According to37
Unless otherwise specified, this section on Company positioning (ListCo positioning) has been drafted based on information
provided by the Company/ListCo. Frost & Sullivan has not conducted any independent diligence on the data or information thus
obtained.

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Frost & Sullivan, 17LIVE is the first Vliver agency with its’ own live streaming platform and is poised for asignificantly strong growth in the forecast period.
Taiwan17LIVE adopts a multi-pronged approach to increase brand awareness and market penetration in Taiwan.
The company regularly hosts offline events, such as newbie exclusive programs, to incubate new streamersand music events featuring the 17LIVE’s musician streamers. In addition, 17LIVE participates in various
government events, such as Taiwan Lantern Festival and Creative Expo Taiwan, to increase its brandexposure. On top of building an offline presence, it engages in strategic partnerships to spread brandawareness through different channels. For instance, by sponsoring a professional basketball team,Kaohsiung Steelers, 17LIVE has incorporated its name into its logo and enjoys publicity at each of thebaseball team’s sporting event and press release. Thus far, 17LIVE is the only pure-play interactive video
stream platform with such a co-branding strategy with a leading professional sports club. Additionally, thecompany collaborated with Sanrio, a leading Japanese entertainment company, and Supau, a top
Taiwanese drinks brand, to promote itself.
Offering localized content is a crucial success factor for attracting and retaining live stream users. 17LIVE
has adopted a unique strategy in Taiwan by engaging with politicians from various political parties andinviting them to participate in live streaming on its platform. Some of the Taiwan politicians that haveappeared on 17LIVE’s platform include the Taiwan President, Tsai Ing-Wen, and the former Mayor of Taipei,
Ko Wen-je. The platform’s original content offerings include live singing competitions, fortune telling
programs, and outdoor game shows.

3.5

OPPORTUNITIES

Horizontal and Vertical Integration 38
Taiwan's interactive video streaming market has reached a mature stage and is experiencing consolidation.
Three major players, 17LIVE, Lang Live, and UpLive, hold a combined market share of about 65%, with
17LIVE alone accounting for 26.9% of the market. This dominance has resulted in other players, such as
Bigo Live, gradually fading out of the Taiwanese market. In Japan, the interactive live streaming industry
has also seen significant development and expansion. Several major players, such as 17Live, Pococha
and Twitch, have established a dominant position, holding a combined market share of around 54.1%.
While Taiwan is in a consolidation stage, Japan’s market is well established, with companies adopting
various forms of vertical integration to strengthen their market position. Three of the main vertical integration
approaches are content creation, technology development and monetization.
In the pure-play interactive video streaming industry, quality streamers are a crucial success factor, as
users tend to follow the streamers rather than the platform. However, online celebrities or influencers
typically have a limited lifespan, making it unsustainable for the streaming platforms to rely solely on UGC
for revenue. To address this, interactive video streaming platforms have developed in-house programs toenhance user stickiness and retention. For example, 17LIVE offers unique content, such as fortune-telling
programs and outdoor game shows, as part of its product differentiation strategy, which other leading
players in interactive video streaming market will likely adopt. Similar to Taiwan, having quality streamers
is a key success factor for live streaming platforms in Japan. These platforms focus on attracting andretaining top content creators to appeal to their audiences.
Interactive video streaming companies may also pursue vertical integration, which can offer significant
benefits in Taiwan's relatively mature market. By vertically integrating their operations, interactive video
streaming companies can have more control over the entire production process, from sourcing talent and38

Vertical integration refers to the integration of two firms that are involved in different stages of the supply chain or production process.
Horizontal integration occurs when a company expands its business by acquiring or merging with similar companies in the same
industry and at the same level of the supply chain.

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creating content to delivering it to users. This allows for streamlined operations, increased efficiency, andimproved coordination between different aspects of the business. It reduces reliance on external partners
and platforms, providing greater autonomy and flexibility in decision-making. With inhouse teams for talentmanagement, content production, and marketing, interactive video streaming companies can eliminate
intermediary costs and capture more value their services generate. This can result in higher profit margins
and increased competitiveness in the market.
Live Commerce
Taiwan’s eCommerce penetration rate exceeded 50% in 202239. As the demand for online products andservices continues to increase, retailers in Taiwan are intensifying their efforts to expand their eCommerce
presence. In this regard, many retailers are incorporating live commerce into their overall eCommerce
strategy. Live commerce offers a highly interactive and real-time engagement experience leveraging theurgency created during limited live commerce sessions. Consequently, Frost & Sullivan believes that theconversion rate of live commerce is expected to surpass that of traditional eCommerce.
Live commerce in Japan is still in its early stages but shows growth potential. Only a small percentage of
respondents have made purchases through live commerce platforms, indicating a low adoption rate.
However, owing to enthusiasm and momentum surrounding live commerce, the companies in theeCommerce industry are actively working to enhance its popularity. The market's expansion will require a
shift in Japanese society's online shopping behavior, which may take time owing to cultural reasons.
Nonetheless, the lack of a dominant player in the market presents an opportunity for early entrants toestablish themselves and access potential revenue.
V-Livers
V-Livers present significant opportunities for the interactive video streaming industry. Due to their digitalnature, V-Livers can attract a global fan base, transcending language and cultural barriers. This expands
the reach of interactive video streaming platforms and increases their market presence. Moreover, V-Livers
provide diverse monetization channels through virtual gifting, merchandise sales, and paid subscriptions,generating sustainable revenue streams for both the personalities and the platforms. Collaborations withother content creators, virtual or real, offer cross-promotion opportunities and expand brand exposure. VLivers accelerate technological advancements, utilizing cutting-edge technologies, such as motion captureand AI-generated content. By embracing these virtual personalities, interactive stream platforms can tap
into their innovative potential, attract a wider audience, and stay competitive in the evolving landscape of
online entertainment. According to Frost & Sullivan, V-Livers are a significant revenue source in Japan's
interactive video industry and will positively impact its growth in the forecast period. The industry's size isvisible in the market size section for Japan—accounting for 34.4% of the total market size in 2022. Besides
live streaming, one of the most promising opportunities in this market is virtual talent agencies, such as
AnyColor and Hololive.

39

Taiwan Network Information Center. Service Application Overview.
https://report.twnic.tw/2022/TrendAnalysis_globalCompetitiveness.html. 2022. n.d.

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT4OVERVIEW OF INTERACTIVE VIDEO STREAMING PLATFORM MARKET IN MAJOR
SOUTHEAST ASIAN COUNTRIES

4.1

TRENDS (DRIVERS AND RESTRAINTS)

Following the internet adaptation and development of allied sectors in the region in 2015 and thereafter,
the media and entertainment industry witnessed an increase in the number of content creators who used
live streaming to share snippets of their lives with their followers. Various influencers in different industries,
including beauty bloggers and professional gamers, saw live streaming as an effective way to stayconnected with people. As a result, live blogging platforms, such as Bigo Live, have seen a massive
increase in popularity in Indonesia and Thailand. Social media and eCommerce companies have also
begun offering various live streaming solutions. Countries such as Thailand are at the forefront of live
stream adoption, with many digital consumers making online purchases using live streams.
Indonesia: Interactive video streaming platforms in Indonesia provide localization features, including local
language support, localized content curation, and customer service in the Indonesian language. This
localization strategy enhances user experience and fosters a deeper connection with the local audience.
The Indonesian government has implemented live streaming content regulations to address content
moderation, copyright infringement, and user protection issues. Platforms must comply with theseregulations to operate legally in the country. Social media personalities are also popular live streamers inIndonesia. These personalities often live stream their daily lives, hobbies, ideas, and opinions on various
topics. Some of the most popular social media personalities who live stream in Indonesia include Awkarin,
Jess No Limit, and Raditya Dika. Pure-play interactive video streaming platforms in Indonesia haveintegrated social commerce features, enabling viewers to purchase directly from live streams. For example,
Uplive, a live streaming platform, incorporates eCommerce elements, allowing streamers to sell products
and viewers to make real-time purchases.
The Philippines: Filipino streamers often organize charity streams, donation drives, and fundraising events,
leveraging their live streams to raise awareness and support various social causes. Being the country withthe lowest internet penetration in SEA, it has a smaller fraction of the addressable market. However, withthe 2nd-largest population in SEA, the Philippines market is likely to be a perfect geography for interactive
video streaming companies to expand their operations.
Thailand: Thailand is one of the largest internet consumption countries in the world, with individuals using
it for an average of more than 8 hours per day. Social media platforms have a significant presence inThailand, with platforms such as Facebook, LINE, BIGO, and Instagram enjoying wide usage. Thais use
social media for various purposes, including connecting with friends and family, consuming news andentertainment, and engaging with brands and businesses. With people spending most of such time onsocial activities, online live streaming has a significant opportunity in the country. The Thai government has
been actively promoting digital transformation and internet connectivity across the country. Initiatives suchas the Digital Thailand strategy aim to improve broadband infrastructure, provide internet access to rural
areas, and foster the growth of the digital economy.
Malaysia: Live streaming and eCommerce have started to converge in Malaysia. Brands and retailers
leverage live streaming to showcase and sell products directly to consumers. Live shopping events andproduct demonstrations have become popular, allowing viewers to make real-time purchases during thelive stream. Malaysia has one of the highest internet penetration rates globally, with more than 95% of
individuals using the internet, according to the World Bank in 2021. In line with its high population, Malaysia
is home to one of the largest addressable audiences for live streaming among SEA nations. The Malaysian
government has launched various initiatives to promote digital transformation and internet accessibility.
Programs such as the National Fiberisation and Connectivity Plan aim to improve broadband infrastructureand expand internet connectivity throughout the country. More than 95% of the internet population uses
social media in the country, with platforms such as Facebook, Instagram, and Twitter being popular forsocial networking, content sharing, and communication. The appeal of connecting with friends, sharing
updates, and consuming content has contributed to high internet usage.

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

Singapore: Technological advancements in streaming technology have improved Singapore's overall live
streaming experience. These advancements include better video quality, reduced latency, and enhanced
interactivity, making live streams more engaging and accessible. Singapore has one of the highestmonetized customer penetration rates for interactive video streaming platforms, with the average revenue
per user being one of the highest in SEA. This factor contributes to a large market size for Singapore in live
streaming, even with a relatively low population. About 90% of live streaming conversations center around
Millennials and Gen Z or those aged between 18 to 34. This group is also more supportive of live streaming
content and mostly uses these platforms. The Media Development Authority of Singapore provides
guidelines for online content, including live streaming. To ensure responsible content creation anddistribution, these guidelines cover various aspects, such as classification, content ratings, and age
restrictions.

4.2

MARKET SIZE

The interactive video streaming market in SEA recorded revenues of USD 233.3 million in 2018 andreached USD 953.6 million in 2022 at a CAGR of 42.2%. A booming internet market and increasing digitalawareness owing to the COVID-19 pandemic fueled this growth. Going forward, the market is expected toreach USD 2160.9 million, recording a moderated CAGR of 19.2% from 2023 to 2027.
Figure 4-1: Estimated Market size and forecast of Interactive Video Streaming (USD million), SEA,
2018-2027F

Revenue (USD million)

700.0
600.0
500.0

400.0
300.0
200.0
100.0
0.0
Indonesia

2018
46.1

2019
63.4

2020
169.5

2021
242.4

2022E
251.1

2023F
289.2

2024F
348.5

2025F
426.6

2026F
512.7

2027F
618.4

Malaysia

29.4

37.8

91.9

129.6

128.4

141.5

166.2

196.5

227.9

265.5

Singapore

41.1

45.3

101.9

125.9

126.9

142.3

167.3

200.2

235.8

274.8

Philippines

27.4

36.1

99.0

130.7

127.8

148.9

183.9

232.1

291.2

356.2

Thailand

89.4

107.0

242.6

345.7

319.5

349.9

407.6

483.0

561.3

646.0

Source: Frost & Sullivan’s primary interviews, desktop research and analysis

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4.3

OUTLOOK

With increasing internet and smartphone penetration levels, improvements in digital infrastructure, andvarious SEA governments’ digitalization and smart nation efforts, the quality and penetration rate of live
streaming in the region will continue growing. The industry in SEA is expected to benefit from theemergence of new monetization models as live stream adoption increases. Notably, the model of virtual
gifting, as researchers observed in Northeast Asian countries, such as China, Japan, and Taiwan, will notsustain in SEA owing to the lack of super-spending users who are willing to splurge on expensive virtual
gifts for their favorite streamers.40
A crucial area of growth is the continued expansion of live commerce. According to Frost & Sullivan,
Vietnam, Thailand, and Indonesia are the leading markets in live commerce penetration and market sizeby gross merchandise value. Popular platforms in the region for live shopping include major social media
platforms, such as Facebook, Instagram, and TikTok, and leading eCommerce platforms, including Shopeeand Lazada. Despite the dominance of Facebook and Instagram as major social media platforms hosting
live commerce, they lack live shopping engagement tools and integration with eCommerce engines, suchas conversion tools (e.g., a check-out function). As a result, a growth opportunity in the SEA live commerce
ecosystem lies in live commerce enablers, such as enterprises that provide full-stack solutions for hosting
live commerce on multiple channels, streamlining the process of collecting customer orders from thesevarious channels, and promoting products and live events.
Another growth area in SEA's live stream market is game live streaming. Owing to the popularity of eSports
in the region, SEA has 40 million esports viewers according to industry sources, with gaming content fast
becoming mainstream entertainment. According to industry sources, more than 50% of the region’s online
users consume gaming video content, with YouTube Live and Twitch being the region's most populargaming live stream platforms. As the gaming industry continues to expand, more game live streaming apps
will enter the region to capture this fast-growing market.
As live streaming becomes more prevalent in the region, governments will step up regulatory measures forcontent moderation and copyrights. Also, as awareness about potentially harmful social media content
grows, many countries have implemented or are in the process of introducing laws to protect users fromonline harm. For instance, Singapore proposed a new Code of Practice for Online Safety and the Content
Code for Social Media Services that would legally require social media platforms, which most, if not all,interactive video streaming platforms fall under, to implement safety standards and content moderation
processes.41

40

KrAsia. “Live streaming in Southeast Asia: from ‘in-real-life’ broadcasting to shopping and gaming”. https://kr-asia.com/livestreaming-in-southeast-asia-from-in-real-life-broadcasting-to-shopping-and-gaming. 30 Sep 2019.
41
The Straits Times. “S'pore joins other places that have enacted or proposed laws to regulate online content”.
https://www.straitstimes.com/singapore/spore-joins-other-places-that-have-enacted-or-proposed-laws-to-regulate-online-content. 20
Jun 2022.

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5

BRIEF OVERVIEW OF V-LIVERS LANDSCAPE

5.1

INDUSTRY OVERVIEWJapan
The Animation Comic and Games (ACG) culture, which encompasses anime, comics, and games,
originated in Japan and has evolved over time. Various economic and social events, including Manga (aform of Japanese comics) and anime, have influenced the development of ACG. Even during the economiccrisis years in Japan, the ACG industry remained stable and continued to produce influential works. The
emergence of the internet facilitated the promotion of ACG culture globally, and online communities
dedicated to discussing anime and Manga flourished.
The V-Livers concept in Japan deeply connects with ACG. The 1st appearance of a V-Livers in Japan was
in 1982. It started with Lynn Minmay coming from the anime series Super Dimension Fortress Macross.
The songs Lynn Minmay performed as an idol singer became a hit within the series, and she would later
become the 1st fictional singer to garner major real-world success42. In 1989, the radio program All Night
Nippon introduced Yui Haga, where multiple voice actors and singers took on roles as radio personalities,
swimsuit gravure models, and singers 43.
Following Lynn Minmay, Hatsune Miku originated as a character within the Vocaloid software, which
Crypton Future Media (Sapporo) introduced in 2007. Vocaloid is a virtual female vocal (synthetic voice)singing software. The emergence of user-friendly free software for creating 3D character dances gained
immense popularity among the younger generation, who primarily consumed internet content rather than
traditional television. Many consider these 2 characters the beginning of the virtual live concept in Japan
today, although the name was still not coined back then.
Since 2010, the anime industry has experienced significant expansion across various fronts, including
distribution, collaborations, stage performances, and exhibitions. One recent trend of virtual streamers andidols became especially popular with the lockdowns owing to COVID-19. A notable area of growth is thevirtual live music performed by V-Livers. These virtual idol concerts have transformed the music production,
consumption, and performance experience in our digital society. The concerts are known for their uniqueblend of technology, animation, and live music performance.
The COVID-19 pandemic resulted in a temporary suspension of live presentations by real and idols, leading
to the growth of V-Livers owing to their continued availability online. Nevertheless, in Japan real-life
concerts are regularly held for V-Livers, where the idols are displayed on screen or as a hologram. While
the pandemic has temporarily hindered this upward trajectory, a substantial demand remains for immersive
user experiences centering around anime.44 V-Livers, such as Hatsune Miku and KD/A (a virtual girl groupof Riot Games to promote its video game League of Legends and its in-game products), have gained
significant popularity. These V-Livers have garnered massive fan bases and achieved chart-topping
success. The concept has expanded to include virtual avatars similar to real people, for example, Travis
Scott's virtual concert on Fortnite. V-Livers have emerged as a captivating and influential aspect of ACG
culture, engaging fans and pushing the boundaries of multimedia entertainment 45.

42

Kotaku. The Fictional (Yet Amazingly Popular) Singers of Japan. https://kotaku.com/the-fictional-yet-amazingly-popular-singers-ofjapan-5940894
43
RYM.
Japanese
Idol
Compendiumhttps://rateyourmusic.com/list/Fyaos/%E2%9C%AFjapanese-idolcompendium%E2%9C%AF/7/
44
Nikkei Asia. "Japan's music industry rises again in new 'age of discovery”. https://asia.nikkei.com/Business/Business-trends/Japans-music-industry-rises-again-in-new-age-of-discovery
45
Rouse. An alternate dimension: Virtual idols. https://rouse.com/insights/news/2020/an-alternate-dimension-virtual-idols.

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TaiwanTaiwan's V-Liver concept is nascent and is significantly different from the North Asian market, which is moredeveloped. The animation industry started developing in recent years because of the sharp increase inmobile device usage in the country and the development of new media platforms, such as the interactive
video streaming industry, from 2016 onward 46. This resulted in new opportunities and markets for content
creators to leverage. The concept of V-Liver became popular as technology advanced in areas such as
motion capture and gesture control.
Moreover, Taiwan has also experienced the development of the ACG sub-culture since the 1990s, whenmost of the fan population were adolescents 47. This translated into physical conventions, such as ComicWorld, a quarterly event Taiwan has held since 1997, with turnouts of approximately 5000 participants ateach event48. The popularity of the ACG sub-culture has grown tremendously during the past decade, with
events, such as the 2023 Taichung International ACG Expo in Taiwan, continuing to see many visitors 49.
The growth of the ACG sub-culture has the potential to spill over to the V-Liver concept in Taiwan, which
Vtubers are driving from the Japanese market. Momosuze Nene is a Vtuber from Japan with a strong
following outside of Japan in countries such as Taiwan and Hong Kong, with an average fan gifting between
30,000 to 50,000 Taiwan dollars 50. The adoption of V-Liver in Taiwan is likely to increase in the forecast
period owing to the existing Japanese Vtubers and the ACG culture that has established itself within the
country.
SEA
The ACG culture has flourished in SEA during the past decade, with animation titles taking up a sizable
proportion of the total share of minutes watched in the media and entertainment industry. On Netflix inIndonesia, about 18% of the total minutes watched were anime titles, lagging behind only more establishedcontent, such as Korean (31%) and American titles (29%) 51. Frost & Sullivan estimates that this preferenceis likely to be consistent among most SEA countries because of the cultural and geographical proximity to
Japan, which has seen a significant expansion of anime during the past few decades.
V-Livers in SEA are still nascent entities with only a handful of use cases. One such case was the launchof Project Kavvai, a program to identify and develop V-Livers in ASEAN52. Aozora Kurumi was the 1st VLivers under this program and was going to generate online content in areas such as gaming and lifestyle 53.
However, Kurumi was only active for 1 year and retired from the space in 2022. Kurumi would remain in
the broader ecosystem of V-Livers as part of Project Kavvai, as the region continued to embrace theconcept of a V-Livers54.
From these experiences, the region has increasingly noticed the potential of V-Livers in areas such asbrand and marketing, which drives the acceptance and usage of V-Livers in SEA. The increased
accessibility of animation titles and collaborations with mainstream media are crucial drivers that is likely to
improve the general acceptance of anime in SEA 55 and generate a second-order effect to boost the46

Animation and Visual Effects Association. https://www.avataiwan.org/㉑ӻ㠷㐓䎧?lang=en. Date accessed: 13 June 2023
Jin-shiow, Chen. The Comic/anime Fan Culture in Taiwan: With a Focus on Adolescents’ Experiences.
https://core.ac.uk/download/pdf/51288538.pdf. 1 January 2003. Date accessed: 11 July 2023.
48
Ibid pp 3
49
Sean, Lin. Taichung International ACG Expo kicks off. FocusTaiwan. https://focustaiwan.tw/culture/202304010008. 4 January 2023.
Date accessed: 11 July 2023.
50
Ching-hsuan, Hung. Japanese Vtuber, a virtual anime pop idol and show host sets Taiwan alight. Radio Free Asia.
https://www.rfa.org/english/news/china/taiwan-vtuber-08062022083451.html. 6 August 2022. Date accessed: 11 July 2023
51
Culture Group. 2023 Culture Drop | The Anime Impact. https://culturegroup.asia/content/culture-drop/2023-culture-drop-the-animeimpact/. 8 June 2023. Date accessed: 18 July 2023.
52
Sivakumar, Yoganeetha. airasia retires first virtual idol Kurumi after one year. https://www.marketing-interactive.com/airasia-retiresfirst-virtual-idol-kurumi-after-one-year. 5 July 2022. Date accessed: 18 July 2023.
53
Lai, Adrian. Malaysian Airline AirAsia is Debuting A Virtual Idol in Southeast Asia. https://sea.ign.com/airasia/171710/news/amalaysian-airline-is-debuting-a-virtual-idol-for-gaming-in-southeast-asia. 6 May 2021. Date accessed: 18 July 2023.
54
Sivakumar, Yoganeetha. airasia retires first virtual idol Kurumi after one year. https://www.marketing-interactive.com/airasia-retiresfirst-virtual-idol-kurumi-after-one-year. 5 July 2022. Date accessed: 18 July 2023.
55
Cameron, Robert. Brands Should Harness the Power of Anime in Their Marketing Strategy in Southeast Asia.
https://www.brandinginasia.com/brands-should-harness-the-power-of-anime-in-their-marketing-strategy-in-southeast-asia/. 13 June
2023. Date accessed: 18 July 2023.
47

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT

popularity of V-Livers in the region. Furthermore, the current crop of V-Livers has already embraced
localization where the idol is fluent and can converse in languages and dialects familiar to the region 56. This
would be an important driver for the acceptance of V-Livers within the region, as viewers will be able todirectly relate to and connect with the V-Livers.
United States of America (USA)The V-Liver concept in the USA is part of the broader global trend of interactive entertainment. With the
emergence of the interactive entertainment industry, comprising virtual idols, virtual streamers, virtualhumans, and digital personalities, the concept is likely to unlock its’ growth potential in the forecast period.
The USA, Japan, Indonesia, and China have a significant user base for V-Livers.57 The USA, in particular,
is the largest entertainment consumer and media market globally. Internet users in the USA spend asignificant amount of time with various sources of entertainment, making it an attractive consumer market
for V-Liver. Moreover, the pervasive influence of Japanese anime and games in the USA is also increasing,with Japanese companies such as Nintendo playing a significant role in increasing the popularity of ACG
among North American fans. Further, akin to Japan, North American countries place significant emphasison copyright protection, encompassing software and virtual character design copyright making it suitablefor IP virtual live development.58
The development of digital characters or personas in the USA is trending toward virtual influencers. Whilea V-Liver is a character or persona primarily associated with the field of music and entertainment, virtual
influencers are used for marketing and promotional purposes. They often resemble real-life humans thatprofessionals make using advanced technology such as computer-generated imagery. Virtual influencers
are present on social media platforms and collaborate with brands to reach a wider audience. Virtual
influencers have gained popularity in recent years, particularly in the fashion and beauty industry. In theUSA, virtual influencers can have a substantial following on social media platforms, engaging millions ofusers. For example, virtual influencers, such as Lu Do Magalu, have gained 6.4 million Instagram followers,
while Lil Miquela has 2.7 million Instagram followers. These numbers showcase the influence and impactthat virtual influencers have on their audience. Brands have recognized the power of virtual influencers inreaching and engaging with consumers, due to the unique opportunity accorded to brands to createcustomized digital characters representing their values and brand identity. Quality of content is a major
reason for a virtual influencer’s fan following. According to an industry survey 59 among consumers in the
USA who followed at least 1 virtual influencer, content dominated with 26.6%, 18.6% of respondents cited
virtual influencer storytelling, and 15.5% said they found virtual influencers to be inspirational.
Frost & Sullivan is of the opinion that both virtual influencers and V-Liver have emerged as a new trend insocial media and influencer marketing owing to their ability to effectively promote products and services
and facilitate collaborations with their dedicated fan base, offering promising prospects globally and in the
USA.

56

Lai, Adrian. Malaysian Airline AirAsia is Debuting A Virtual Idol in Southeast Asia. https://sea.ign.com/airasia/171710/news/amalaysian-airline-is-debuting-a-virtual-idol-for-gaming-in-southeast-asia. 6 May 2021. Date accessed: 18 July 2023.
57
Sun Lei and Sun Jiashan. China Daily. Time to unlock growth potential of ‘virtual idol’ sector. Time to unlock growth potential of'virtual idol' sector - Chinadaily.com.cn. 22 July 2023. Date accessed: 25 July 2023.
58
Ibid.
59
The Influencer Marketing Factory. (March 29, 2022). Reasons why consumers follow virtual influencers in the United States as ofMarch 2022 [Graph]. In Statista. Retrieved August 02, 2023, from https://www.statista.com/statistics/1302739/reasons-consumersfollow-virtual-influencers-us/

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5.2

DRIVERS

Transformative technologies fuel the increase of V-Livers
The rise of V-Livers in the late 2010s, particularly in countries such as China, can be attributed to significant
investments in this area and the advancements in modern technologies, such as voice and motion captureand AR. 60 These investments have paved the way for notable developments in motion capture
technologies, leveraging ML and AI. Consequently, the visual effects of V-Livers have become moreaccurate and can now be produced faster. 61 The enhanced motion capture capabilities are crucial for VLivers, as they enable a more realistic experience, capturing many actions with greater detail throughvarious sensors tracking the movements of the streamer in real time. Furthermore, the availability of fasterinternet connections has played a vital role in supporting the utilization of bandwidth-intensive technologies,
improving the overall quality of V-Livers and live performances. This attracts a larger user base to participate
in virtual live events, creating a more engaging and immersive experience for the audience.
Immersive collaborative platforms facilitate growth of V-Livers, revolutionizing fan engagement
Collaborative platforms have facilitated the emergence of V-Livers by providing a global reach, enabling
UGC, and fostering interaction and engagement between fans and V-Livers. These platforms have allowedfans to actively contribute to the V-Liver ecosystem while facilitating direct interaction and a sense ofownership. According to Frost & Sullivan, combining technology and fan engagement has transformed VLivers into a cultural phenomenon, shaping new entertainment trends and monetization opportunities. Frost& Sullivan believes that such user-engagement for the audience and additional revenue for V-Livers arelikely to serve as an impetus for future growth of V-Livers in the country.
V-Livers provide reliable monetizable assets
V-Livers, whether based on AI or personified by individuals behind avatars, offer unique opportunities formonetization and asset reliability. 62 AI-based V-Livers are seen as reliable assets owing to their consistent
performance and lack of personal life issues that could impact their popularity. 63 This reliability attracts
investors and donors interested in supporting these V-Livers. Additionally, the anonymity and separation of
their virtual and real lives make them appealing from a branding perspective, allowing their identities toremain hidden and focusing solely on their work as V-Livers.
V-Livers may also contribute to increased merchandise sales in 2 main ways. Firstly, they possess a
dedicated and passionate fan base that eagerly purchases merchandise related to their favorite idols,
including clothing, accessories, and collectibles. Brands can capitalize on this by collaborating with V-Livers
to offer exclusive merchandise and customized products, tapping into the existing fan base's enthusiasm.
Secondly, V-Livers enable brands to explore virtual selling, leveraging technology to connect withcustomers and sell products or services remotely. This approach proves valuable in instances where there
are limited physical sales channels, as brands can engage with fans through virtual events, live streams,
social media, and VR experiences, creating interactive and immersive shopping opportunities.

60

Y. Q. Wang. A Brief Analysis of the Development of Chinese Virtual Idol Industry Empowered by 5G+Motion Capture TechnologyTaking
theVirtualIdol
GroupA-SOULasan
Example.
JournalofPhysics:
Conference
Series.
https://iopscience.iop.org/article/10.1088/1742-6596/2278/1/012011/pdf. 2022. Date accessed: 14 June 2023
61
Salvi, Nikhil. Machine Learning for Motion Capture: How AI is transforming the accuracy and speed of motion capture in visual
effects production. 22 March 2023. Date accessed: 15 June 2023.
62
Phuc, Dang. Virtual Idol: A Product of Advanced Technology You Need to Know. https://animost.com/ideas-inspirations/virtual-idol/.
16 January 2023. Date accessed: 15 June 2023
63
Shen, Lu. Why China’s falling in love with virtual idols. Protocol. https://www.protocol.com/china/virtual-idols-metaverse-china. 12
October 2021. Date accessed: 13 June 2023

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5.3

MARKET SIZE

TaiwanFrost & Sullivan estimates that the market for V-Livers in Taiwan will grow from USD 0.6 million in 2023 to
USD 1.8 million in 2027, with a CAGR of 30.6% for the period. The current market size of V-Livers in Taiwan
is much smaller than in Japan. The existing Vtubers from Taiwan are driven by individuals as opposed to
Vtuber agencies which are lacking in Taiwan. The adoption of advanced technology, which already exists
in the Japanese market, will drive future growth of V-Livers. These technologies are likely to enable moresophisticated motion capture and facilitate the development of new content for V-Livers. The recognition of
the reliability and effectiveness of V-Livers in the interactive video streaming industry is also likely to attract
more investors driving it further. Additionally, enterprises targeting Gen Z consumers will show increased
interest in leveraging V-Livers as a crucial marketing strategy to engage with this younger demographic.

(USD thousand)Figure 5ǦǦ1: Estimated Revenue Forecast of V-Liver Livestreaming (USD thousand), Taiwan, 20222027F
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

1,831.1
1,372.5
1,044.1
805.4
397.6

2021

497.9

2022

629.5

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research and analysis
Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s
desktop research on sources including but not limited to databases of industry associations, trade bodies, and government
agencies.
2.

The market size is estimated as total addressable market (TAM), calculated based on the estimation of the total revenue fromthe V-Liver market which consists of Vtubers (virtual idols on YouTube) and idols on the interactive video streaming platforms
who use virtual avatars.

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORTJapan
Frost & Sullivan estimates that the market for V-Livers in Japan is expected to grow from USD 973.3 million
in 2023 to approximately USD 3,864.8 million in 2027, at a CAGR of 41.2% for the period. The current
market size of V-Livers64 in Japan largely comprises Vtubers created by individuals which makes up the
majority of Vlivers in terms of numbers of creators, however, in terms of monetary value, the bigger shareof revenue still originated from those created by the Vliver companies. The introduction of new technologies
and better internet connection is expected to drive future growth, improving the experience of virtual live
streaming.
Figure 5-2: Estimated Revenue Forecast of V-Liver Livestreaming (USD Million), Japan, 2021-2027F
4500

3,864.8(USD millions)

4000

3500

2,868.7

3000

2500

2,077.3

2000

1,441.6

1500
1000

500

630.7

973.3

262.3

0
2021

2022

2023F

2024F

2025F

2026F

2027F

Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s
desktop research on sources including but not limited to databases of industry associations, trade bodies, government agencies.

5.4

DEMOGRAPHICS

According to Frost & Sullivan, most V-Liver followers belong to the Gen Z. This trend is global, including inmarkets such as Taiwan and Japan. In Taiwan, more than 75% of V-Liver viewers fall within the age rangeof 16 to 23. Whereas, in Japan, Holo Live and NIJISANJI, to which the majority of popular Vtubers belong,state that about 45% of their viewers are between the ages of 18 and 24 and about 30% between the agesof 25 and 34 65 . These age groups represent a significant consumer segment owing to its strong
technological exposure and awareness of the latest trends within the entertainment industry. In contrast,fans of traditional idols encompass a more diverse range of age groups. This diversity stems from V-Liverfollowers' exposure to technology from a young age, fostering a greater appreciation and acceptance ofanimated content. On the other hand, the followers of in-person idols seek companionship and, therefore,prioritize interactions with real individuals. This preference for genuine human interaction contributes to thediverse nature of in-person idol consumers.

64

There were approximately 20,000 V-Livers in Japan at the end of 2022.
PIA. Ǐ䁝䀸㘵ǡ䀓䃜ǐǿǱ䃢䠁ǮȠ˛㤕㘵Ӫ≇ᤑབྷѝȃǋVTuber࣭ɘόɉɫɳȪȬɑɳǌȃᣬǪǝǻǟǢǴǙɥȬɻɐǽǃɃȸɩɻɐ⍫⭘ᯩ⌅. https://data.pia.co.jp/news/pia-segments/5362/

65

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5.5

GLOBAL OUTLOOK

V-Livers are expected to achieve significant growth in the upcoming decade, primarily in East Asia,
particularly China and Japan. Taiwan, owing to its proximity to these countries, is likely to benefit from aspill-over effect. The technological advancements within the V-Liver landscape is expected to drive thisanticipated growth, resulting in faster response speeds and shorter development cycles for new idols owing
to improvements in AI. Furthermore, this growth is likely to generate new opportunities in marketing andadvertising, as brands recognize V-Livers as valuable collaborators that offer improved access to the target
demographic of 16 to 23-year-olds66. Frost & Sullivan believes that as these developments gain traction,
global brands will take notice, potentially expanding the wave of V-Liver adoption beyond East Asia andinto Western markets. This in-turn is likely to create new revenue streams for the V-Livers and catalyze
sustained growth.

66

Mengyuan Ge. China’s virtual idols are reshaping the ways brands reach Gen Z consumers. KrAsia. https://kr-asia.com/chinasvirtual-idols-are-reshaping-the-ways-brands-reach-gen-z-consumers. 29 January 2022. Date accessed: 4 July 2023.

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BRIEF OVERVIEW OF LIVE COMMERCE

6.1

INDUSTRY OVERVIEWLive commerce, or livestream shopping, is an eCommerce model that integrates online shopping withinteractive video streaming. It entails a live broadcast in which a host or influencer showcases anddemonstrates products in real time to an audience virtually, allowing viewers to interact, ask questions, andmake purchases directly through the live stream. Live commerce has gained popularity owing to its ability
to create engaging, interactive, and entertaining shopping experiences. It bridges the gap between
traditional retail and online shopping by providing a unique blend of entertainment, social interaction, andproduct discovery.
Live commerce typically takes place on eCommerce websites and social media platforms. Brands andresellers would partner with influencers or individual creators to conduct live shopping events on theseplatforms. These influencers and individual creators would develop the content for live streams, likely incollaboration with the retailers and brands, including the products they plan to promote, the storylines, andthe scripts. Many live commerce hosts produce, record, and stream live shopping events from their homes
or at retail storefronts. Users usually consume live commerce content via the platform apps they install on
their smartphones or tablets and access through wireless internet. Platforms publishing these live shopping
events usually allow viewers to interact with live commerce hosts through chat functions and reactions.
Retailers and platforms are responsible for ensuring a seamless customer journey on the sites of livecommerce, especially the checkout processes. Typically, a link for live shopping viewers to purchase theitems would appear on-screen. To ensure a frictionless customer journey, retailers and live commerce
platforms must ensure their systems are well-integrated.
China
In recent years, the live commerce market in China has rapidly expanded, and China is now one of themost important participants in the global live commerce market. The COVID-19 lockdown has shifted
consumption from offline to online, stimulating the live commerce market to expand on both the demandand supply sides. Mass consumer goods, including apparel, food and beverages, cosmetic products, andconsumer electronics, initially contributed to the market expansion in China.
According to the China Internet Network Information Center, the users of live commerce in China
experienced significant growth from 220 million in 2018 to 372 million in 2020 and 515 million in 2022,
representing a five-year CAGR of 23.7%. As of December 2022, 68.6% of domestic live-streaming users
use live commerce on domestic live commerce platforms (led by Taobao, Douyin, and Kuaishou), which
are continuously improving their business operations and infrastructures to enhance merchants’ and users’
experiences.
Going forward, Frost & Sullivan believes that the live commerce market in China is expected to continue
its’ growth momentum, with a greater variety of product categories and types and enhanced product andservice quality. Nevertheless, it is forecasted that user scale and penetration growth in China may slow
down in the forecast period given the existing high-base. Taobao, Douyin, Kuaishou, and other domestic
live commerce platforms will continue establishing differentiated competitive advantages to drive user traffic
and revenue.
TaiwanTaiwan's live commerce market follows China's model, incorporating live streaming on comprehensive
eCommerce sites, short video platforms, and social media. Facebook and YouTube are the most popular
platforms for social media live commerce, while Line entered the market in 2018 but remains smaller. Momo
and Shopee are the top choices for eCommerce platforms with live stream functions. Brands are
considering developing their own live stream channels on their official websites to avoid processing feeson social media or eCommerce platforms. According to industry sources, more than 70% of internet users
in Taiwan have participated in live commerce streams, indicating a significantly high penetration rate forlive commerce. Moreover, more than 25% of internet users make purchases during live stream sessions.
Owing to the relatively high conversion rate of live commerce, retailers are increasingly emphasizing live
streaming as a crucial marketing strategy.
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The live commerce market in Japan is still in its relatively early stages, showing slower progress despite
the COVID-19 pandemic acting as a catalyst. The slow growth may be due to the preference for in-person
shopping experiences and the dominance of established eCommerce platforms. However, consistent YoY
growth has indicated the market's potential. The future trajectory of the live commerce market in Japan
heavily relies on the platforms that facilitate its integration. Live commerce predominantly occurs on popularsocial media platforms, such as Instagram and YouTube Live. Influencers and sellers conduct live sessions
on these platforms and separate websites, announcing product availability and details. These interactive
live sessions generate high levels of engagement, resulting in sold-out products and significant shopping
activity. However, a notable constraint in the Japanese market is the lack of integrated platforms seamlessly
combining live commerce and social media. Existing platforms provide separate services rather than aunified live commerce experience. This limitation hampers the widespread integration of live commerce into
popular platforms and presents a hurdle to this practice's overall growth and adoption. Several players
contribute to the live commerce market in Japan, with SHOWROOM holding the largest market share,
followed by platforms such as Base and Mirrativ.

6.2

KEY DRIVERS

Increasing shift in consumer preference toward mobile-first shopping
A notable increase in consumer preference for mobile-first shopping reflects a shift in shopping habits. With
smartphones' widespread availability and convenience, more consumers rely on mobile devices for
shopping. Several factors drive this trend, including the ease of browsing and purchasing products onmobile apps, the ability to shop on the go, and the seamless integration of mobile wallets and payment
options. The trend of mobile-first shopping will continue, and as technology advances and mobile devices
become more sophisticated, consumers will increasingly rely on their smartphones for shopping, prompting
retailers to prioritize mobile optimization and create seamless experiences across devices.
Growth of influencer marketing
The exponential growth of social media usage has led to the emergence of influencers or microcelebrities 67.
A research study revealed that young consumers often refer to social media platforms, such as Instagram
or YouTube, to gather information from product reviews before making purchases. Social influencers’
recommendations on these platforms often shape consumers’ buying decisions. Younger social media
users perceive endorsements by these online celebrities as more credible and relatable. 68 As a result,retailers increasingly employ influencers to market products on social media live streams as a crucial
marketing strategy.
Integration of live stream and eCommerce platform to create interactive and engaging shopping
experiences
Advancements in live commerce technology have integrated live stream features with eCommerce
platforms, enabling accessible checkout options during live streams and real-time interactions between
buyers and hosts. This seamless combination of audience engagement and instant purchase is a crucial
enabler of social media commerce. The increasing consumer demand for interactive and engaging
shopping experiences in Japan drives live commerce, which allows consumers to participate in real-time
product demonstrations, ask questions, and receive immediate responses, creating a personalized andimmersive shopping journey that appeals to Japanese consumers.

67

Croes & Bartels. Young adults’ motivations for following social influencers and their relationship to identification and buying
behaviour. https://www.sciencedirect.com/science/article/pii/S0747563221002338. Nov 2021.
Ibid.

68

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6.3

GROWTH CHALLENGES

Efficiently scaling and streamlining logistical operations is crucial for the successful expansion oflive commerce
Effective logistics and distribution channels are crucial in ensuring a smooth last mile user journey in livecommerce. Uncertainty in parcel arrival time is a common pain point for online shoppers, highlighting theimportance of flexible logistics services. However, for interactive video streaming companies primarily
focused on live commerce, establishing an efficient logistics network can be challenging, as they may lackexpertise in eCommerce logistics. For example in Japan, a crucial challenge is the availability of products
to meet the demand that live commerce sessions generate. The success of live commerce campaigns often
exceeds expectations, resulting in inventory shortages and difficulties in fulfilling customer orders promptly.
Technical problems, particularly server-related issues, also challenge the smooth functioning of livecommerce in Japan. Robust server infrastructure is necessary to handle the high traffic volume and realtime interactions during live sessions. Any technical glitches or server failures can disrupt the live commerce
experience, leading to customer dissatisfaction and missed sales opportunities. Therefore, investing in thenecessary technical infrastructure is crucial to ensure live commerce operations run smoothly.
The risk of fraud can pose a challenge to the live commerce industry
The risk of fraud poses a significant challenge in the live commerce industry, as the real-time nature oftransactions and the lack of physical interaction make it harder to verify the authenticity of sellers andproducts, requiring stringent measures to ensure consumer trust and mitigate fraudulent activities. In
Taiwan, for example, regulations on online businesses are lacking, contributing to a lack of trust in online
sellers, including live commerce hosts. Consumers remain vulnerable to online fraud and consider buying
from individual influencers riskier than purchasing from an established brand or retailer. The perceived riskof not receiving the agreed products (or that products will be below expectations) restrains consumers frompurchasing through live stream shopping channels. Hence, effective regulation to ensure consumer safety
when engaging in online transactions is a crucial enabler for live commerce’s future growth.

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6.4

MARKET SIZE

TaiwanFrost & Sullivan forecasts that Taiwan's social media live commerce market is expected to grow from USD
2,229.0 million in 2023 to USD 5,047.6 million in 2027, at a CAGR of 22.7%. The COVID-19 pandemic andlockdowns have greatly accelerated the growth of online retail, including social media live commerce. The
closure of physical stores fueled this trend, prompting consumers to turn to online platforms, including
Facebook and YouTube, for purchases. Group bulk purchases, especially among middle-aged consumers
with limited access to overseas products, have become popular in Taiwan. While growth will remain strong
post-pandemic, it may moderate as the initial surge in online shopping subsides.
Figure 6-1: Estimated Revenue Forecast of Social Media Live Commerce (USD million), Taiwan,
2020-2027F
5,047.6

5,000.0(USD millions)

4,157.8
4,000.0

3,399.7

2,761.7

3,000.0

2,229.0

2,000.0
1,149.0

1,430.0

1,788.9

1,000.0
2020

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s
desktop research on sources including but not limited to databases of industry associations, trade bodies, government agencies.
2.

The market size is estimated as TAM, calculated based on the estimation of total revenue from live commerce sales on social
media platforms in Taiwan; i.e., it does not include live commerce sales on eCommerce platforms or revenue of companies thatoffer live commerce as software-as-a-service

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Japan
While currently small, the live commerce market in Japan shows significant potential. As platforms andbrands invest in expanding and improving live commerce offerings, companies can tap into untappedmarket segments and drive growth. The market size of live commerce in Japan was about USD 201.8
million in 2022 registering a historical CAGR of 10.2% over 2020-2022. Going forward, it is expected to
grow from USD 236.9 million in 2023 to USD 1.0 billion in 2027 at a CAGR of 43.6%. The market size
includes social networking services (SNS), Software-as-a-Service (SaaS),and dedicated mobile
applications. Among the different segments, SNS platforms dominate the market, accounting for
approximately 60% of the market share in 2022. SaaS solutions comprise a 10% share, while dedicatedlive commerce apps, such as Showroom and Base, make up the remaining 30%.
In Japan, industries often use live commerce as a marketing tool and promote collaborations between
influencers and brands or live stream events featuring popular personalities. Live streaming activities
typically take place on platforms such as YouTube, Instagram, or Facebook, while sales happen on
separate dedicated websites.
Frost & Sullivan believes Japan's live commerce market experienced a slower onset of growth in thehistorical period, and is likely to register a faster growth rate starting in 2024. This is because major retailplayers in Japan, such as Shiseido, Isetan, and LaLaport, are currently entering the live commerce market
and leveraging their already established brand name for sales and engagement with customers. Theseestablished brands' entry in the market is likely to contribute to the expansion and accelerated growth oflive commerce in Japan.
Figure 6-2: Estimated Revenue Forecast of Live Commerce (USD million), Japan, 2020-2027F
1,200
1,008.6(USD million)

1,000
800

655.2

600
438.6
400
200

166.2

180.4

201.8

236.9

2020

2021

2022

2023F

306.5

0
2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research and analysis
Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, publicly available industry data; (iii) Frost & Sullivan’s desktop
research on sources including but not limited to databases of industry associations, trade bodies, government agencies.
2. The market size is estimated as TAM, calculated based on the estimation of total revenue from live commerce sales on social
media platforms in Japan.
3. The market size reflects the live commerce conducted through SNS, SaaS and platforms.

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China
China's live commerce market has significantly expanded during the last 5 years because of multiple factors
related to supply and demand. According to Frost & Sullivan, the market size of the live commerce industry
in China, in terms of revenue, has increased from RMB 33.7 billion (USD 4,718 million) in 2020 to RMB
126.4 billion (USD 17,696 million) in 2022 at a CAGR of 93.7%. On the supply side, the primary market
drivers are the massive investments in manpower, capital, and traffic by major live commerce platforms,
the increasing diversity of product categories and types, the development of live streaming and relevant
technologies, the improvement of streamers’ professionalism, and the expansion of MCN live streaming
process management services.
Going forward, China's live commerce market is likely to maintain its growth momentum, albeit at a lower
rate, owing to the market maturity of the live commerce sector. According to Frost & Sullivan, the market
size of the live commerce industry in China, in terms of revenue, will reach RMB 201.6 billion (USD 28,224
million) in 2027 at a CAGR of 10.2% during 2023–2027. In parallel, the user base of live commerce in China
is also expected to grow from 515 million in 2022 to 607 million in 2027.
Figure 6-3: Estimated Revenue Forecast of Live Commerce (USD million), China, 2020-2027F(USD million)

30,00025,00021,630.0
17,696.0

20,00024,052.0

26,054.0

28,224.0

19,166.0

15,0009,506.0

10,0005,000

4,718.0

0
2020

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research and analysis

6.5

TRENDS

Collaboration with global and local brands
Live commerce in Japan is characterized by collaborations between global companies, local entities, andinfluencer-driven brands. Industry leaders, including Uniqlo, Shiseido, and Nike, have explored livecommerce through platforms such as Instagram and are experimenting with SaaS services on theirwebsites. This indicates a growing interest from established brands to leverage the interactive nature of livecommerce and engage with consumers in real time. The trend extends beyond fashion to include various
sectors, such as beauty and makeup.
Increased use of immersive technologies
Features such as AR/VR in product demonstrations, enhancements, advertising, and customer service are
emerging. AR allows consumers to visualize products in real-world environments, giving them a better
sense of how they will look or fit in their own space. VR, on the other hand, creates virtual environmentsthat users can explore, enabling a more interactive and engaging shopping experience These technologies
are likely to enable an immersive and personalized social shopping experience. In the future, consumers
will directly interact with a live commerce host in a virtual shop through avatars. Several social VR start-ups
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have received more funding, as investors have started to see social VR’s potential. 69 Social media giants,
such as Meta, have also made tangible investments in metaverse technology. The company acquired
Oculus VR, Inc., a leading company in immersive VR technology, for USD 2 billion in 2014.70

7

SUMMARY PROSPECTS AND OUTLOOKThe Asian interactive video streaming industry is likely to continue its’ growth trajectory in the forecast
period reaching a cumulative market value of USD 7.7 billion in 2027. V-Liver and Live Commerce are also
expected to register considerable growth in the forecast period reaching market sizes of approximately USD
3.8 billion and USD 6 billion respectively.
Japan is likely to be a key contributor to this growth in growth and is expected to attract more entrants andcompetition among streaming services. This trend reflects the increasing popularity and demand for
streaming content in Japan. The market is expected to continue to grow also owing to the increasing
popularity of virtual live streaming, particularly V-Liver experiences. This immersive and interactive form ofcontent consumption is likely to attract a growing audience, indicating potential opportunities for market
development, such as in live commerce. While live commerce in Japan is still in its early stage, its’ future
depends on integrating live commerce into platforms such as 17LIVE, where influencers and sellers canconduct interactive sessions to promote and sell products.
17LIVE’s strategy for expansion in the Japanese market comprises initiatives in different areas. These
initiatives include a V-Liver (as 17LIVE’s main strategy in the Japanese market is to establish itself as aprominent Vtuber agency), a mobile game (as 17LIVE is venturing into the development of a mobile gamethat encompasses a diverse range of genres to cater to various player preferences), real-time and game interaction (with the Live x Game project merging live streaming interactions with immersive gameplay,
aiming to create an engaging and interactive experience), live commerce (with 17LIVE’s live commerce
strategy involving integrating HandsUp, a live commerce system solution, into the 17LIVE platform), andevents (with 17LIVE organizing a diverse range of events that offer streamers and users unique andimmersive experiences).
In Taiwan, the interactive video streaming market has seen rapid growth in the past decades because of
the introduction of new programs and services during the pandemic. While Taiwan is a mature market in
the interactive video streaming segment, the introduction of new technologies and trends, such as the useof V-Livers, is expected to contribute to the industry's overall growth. The V-Liver industry in Taiwan is stillin its early stages compared to the more developed North Asian markets.
However, recent years have seen increased mobile device usage and the emergence of interactive live
video streaming platforms drive the animation industry’s growth. Additionally, the ACG sub-culture in
Taiwan, which has seen significant growth over the past decade, has the potential to influence the V-Livers.
In Taiwan, live commerce has become a thriving trend in the eCommerce market, and social media has
played a crucial role in driving the growth of live commerce, with Facebook and YouTube being the mostpopular platforms for social media live commerce. A crucial competitive advantage that 17LIVE has over
popular social media live commerce platforms in Taiwan, such as Facebook and YouTube, is strong
relationships with Japanese merchants owing to its existing HandsUp customer base in Japan. This is likely
to allow 17LIVE to facilitate the export of Japanese products to the Taiwan market. Such cross-border traderemains limited to Taiwanese eCommerce platforms. In addition, the company has a ready pool of live
streamers who are well-versed in hosting live stream sessions, a skill required for effective and engaging
live commerce. The company also has a wide pool of existing users that retailers can tap into to expand
69

BeyondGames.biz. Metaverse Startup Raises Funding From Oculus Investors. https://www.beyondgames.biz/21848/metaversestartup-raises-funding-from-oculus-investors/. 26 April 2022.
70
Meta. Facebook to Acquire Oculus. https://about.fb.com/news/2014/03/facebook-to-acquire-oculus/. 25 March 2014.

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the reach of their products. Given that 17LIVE’s target audience is generally middle-aged males withrelatively high income levels, retailers should curate their products and brands to cater to such an audience.
SEA has seen a surge in the popularity of live streaming platforms, with social media and eCommercecompanies offering their own live streaming solutions. The implementation of localized features andregulations in these countries has enhanced the user experience and compliance. Live streaming andeCommerce are converging, allowing brands and retailers to showcase and sell products directly to
consumers. The main area of growth is the continued expansion of live commerce, particularly with livecommerce enablers that provide full-stack solutions, streamlining customer orders and promoting products
and live events across multiple channels. Given 17LIVE’s experience with HandsUP as a live commerce
system solution, the company is likely to tap into this growth opportunity in SEA's live commerce ecosystem.
In addition, the company’s expertise in managing live streamers is expected to enable it to offer talentmanagement services, which could differentiate it from other solution providers.

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APPENDIX F: INDEPENDENT MARKET RESEARCH REPORT8APPENDIX

8.1

HISTORY OF LIVE COMMERCE IN CHINA

Stage I: Emergence (2016)Live streaming has an early origin in China, and domestic PC-based entertainment websites (e.g., games
and live shows) were the ones that first employed this format. Later on, the ecology of the interactive
streaming industry gradually matured as well-known gaming platforms, such as Huya and Douyu, shifted
their focus to mobile live streaming.
For China, 2016 was the 1st year of live commerce. Taobao officially introduced its live streaming toeCommerce in May after a three-month trial run, while JD launched its live streaming function 4 months
later that year. In 2016, China had 325 million users of live streaming, with more than 300 platforms
providing internet live streaming services and a market size of more than RMB 25 billion in terms of grossmerchandise volume (GMV).
Stage II: Rapid Development (2017–2020)
During this period, Taobao started to develop its influencer system (㓒Ӫփ㌫) and successfully spread theconcept of live commerce to broader consumer groups during the Double 11 shopping festival. Livestreaming has become the highlight of its major promotions. Taobao also launched its standalone livecommerce app, Taobao Live (later renamed DianTao), before the Chinese New Year in 2019. Meanwhile,leading short video and social content platforms, including Douyin and Kuaishou, started to enter the live
eCommerce market in March and June of 2018, respectively. They have also gradually launched andenhanced their key eCommerce functions and tools, such as shopping carts and shop entrances, tostrengthen their capabilities and competitiveness during these years. Overall, leading live commerce
platforms in China progressed toward integrating upstream and downstream resources at this stage.
Around this time, the live commerce market also made refinement, with the rapid emergence of professional
market participants, such as MCNs. Most of China's leading live commerce platforms have cultivated theirown super streamers with an annual GMV of more than 10 billion, or even over a billion, in a single live
streaming session. For instance, the 2 largest live commerce streamers in China, Viya and Li Jiaqi,
generated RMB 31.1 billion and RMB 21.9 billion of GMV in 2020, respectively. In addition to professional
and amateur streamers, many celebrities and major open leaders became important participants in the livecommerce broadcast rooms. Factory and shop hosts also began to make an impact, demonstrating a
distinct trend toward popularization.
By the end of 2020, China had registered 8,862 live commerce-related enterprises with 1.23 million
registered streamers. The GMV and revenue of the live commerce market in China reached RMB 1.3 trillion
and RMB 33.7 billion, respectively, in 2020.
Stage III: Standardization (2021-2023)
With approximately 430 million users and a GMV of RMB 2.4 trillion in 2021, the live commerce industry
has become one of the main sectors of the Chinese internet economy. China's live commerce industry has
become increasingly normalized while embracing standardized reform.
Between 2021 and 2023, the Ministry of Commerce, the Cyberspace Administration of China, and otherrelevant departments have successively issued a series of supportive policies encouraging the deep
integration of live commerce with the domestic offline economy and regulatory policies to guide the livecommerce platforms, streamers, service providers, and other market participants in implementing partial
corrections and stabilizing the market.
It is worth noting that Douyin, Taobao, and Kuaishou are all able to provide their users with a differentiatedexperience based on their own competitive advantages and remain the 3 most dominant live eCommerce
platforms in China, accounting for more than 80% of the market in terms of GMV. However, the user trafficof top-tier streamers is gradually being shared with mid-tier streamers and corporate-owned streamers
simultaneously.
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APPENDIX G: GOVERNMENT REGULATIONSGOVERNMENT REGULATIONSThe Target Group conducts its material business operations in Japan and Taiwan. Although theTarget Group is not required to obtain and therefore has not obtained any permits or licences tooperate its business, the live streaming and internet industries are heavily regulated, and certain
registrations and notifications may be required to be made under certain regulations with respect
to the current business of the Target Group as set forth below. The Target Group has made all
registrations and filed all notifications as required under the applicable regulations that would
materially affect its business operations and is in compliance with the laws & regulations thatwould materially affect its business operations.
The following is a summary of the main laws and regulations of Japan and Taiwan that are material
to the Target Group’s business as at the Latest Practicable Date:Japan
Foreign Exchange and Foreign Trade Act of Japan
Foreign Investment
The Foreign Exchange and Foreign Trade Act of Japan (the “FEFTA”) regulates internationaltransactions including payments, capital transactions and inward or outward direct investments.
Although the FEFTA stipulates that foreign investors are generally permitted to make inward
foreign direct investments, prior filing is required for investments in sectors considered to be ofserious concern of national security (the “Designated Business Investments”), and ex post facto
notification is required for certain other sectors. With respect to the prior filing for DesignatedBusiness Investments, the foreign investor must observe a statutory 30-day waiting period after
the prior filing is made to the relevant authorities. During the waiting period, the relevant
authorities will review the proposed investment and determine whether to take any action. The
relevant authorities have discretion to either recommend changes to or discontinue the proposed
investment. If the relevant authorities have no issue with the proposed investment, the foreign
investor may proceed with the proposed investment, subject to conditions (if any). In recent years,
Japanese foreign investment regulations have been tightened by the amended FEFTA (whichcame into full force on 7 June 2020), especially in relation to investments that may impair national
security. Under the amended FEFTA, the threshold for the prior filing requirement relating to theacquisition of shares in a listed company operating in a designated industry by a foreigner has
been lowered from 10% to 1% of the total shares in the listed company. A prior filing exemption
system has also been introduced. Designated industries include services for cyber-security
related industries, such as custom software services, embedded software services, package
software services, data processing services, web portal providers, application service providers,and internet support services.
Dividend Distribution and Proceeds of Sale
Pursuant to the FEFTA, foreign investors are generally permitted to convert dividends paid on
shares in a Japanese company and the proceeds from the sale of shares in a Japanese company
into foreign currency and repatriate abroad.

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APPENDIX G: GOVERNMENT REGULATIONS
Copyright Act of Japan
Authors’ rights with respect to works and performances, phonograms, broadcasts and cablecasts
are protected by the Copyright Act of Japan. If such content infringes on the copyright of third
parties, the platform provider could be liable for damages.
Consumer Contract Act of JapanThe Consumer Contract Act of Japan (the “Consumer Contract Act”) is the primary legislation
which protects the interests of individuals as consumers in Japan. Pursuant to the Consumer
Contract Act, consumers may elect to rescind their offer or acceptance of a contract with business
operators when certain conditions are fulfilled, such as, the offer or acceptance was made due toa misunderstanding on the part of the consumers as a result of any unfair act or omission on thepart of the business operators. Further, any provisions in consumer contracts seeking to exempt
business operators from liability for damages, compel consumers to waive their rights torescission or otherwise unfairly harm the interests of consumers are null and void, in whole or inpart.
Telecommunications Business Act of JapanThe Telecommunications Business Act of Japan (the “TBA”) regulates telecommunication
businesses in order to ensure the proper and reasonable operation of telecommunication
businesses and promote fair competition thereof. Under the TBA, a person who conducts thetelecommunications business is generally required to be registered with the Minister of Internal
Affairs and Communications of Japan as a telecommunications business operator. However, as
long as the scale of the telecommunications line facilities or the scope of areas where thetelecommunications line facilities are installed do not exceed certain thresholds set forth in the
Ordinance for Enforcement of the TBA, or fall within a certain category of radio facilities,
submission of a written notification to the Minister of Internal Affairs and Communications ofJapan, rather than registration, is required. If a corporation fails to comply with the suchregistration or notification requirement under the TBA, the responsible officer or employee of suchcorporation who violated such registration or notification requirement may be subject toimprisonment for not more than six months or a fine of not more than JPY 500,000, and thecorporation may be subject to a fine of not more than JPY 500,000. For details on the potential
risk of violation by the Target Group, please refer to Section 16.2 titled “Risk Factors – Risks
relating to Doing Business in Jurisdictions in which the Target Group Operates – The Target Groupmay be subject to licensing requirements and restrictions on foreign investment in jurisdictions inwhich it operates” of this Circular.
No person is allowed to violate the secrecy of communications handled by a telecommunications
business operator, such as unauthorised acquisition, use or disclosure of such communications(including, but not limited to, the contents of communications, the dates and places of thecommunications, the names and addresses, telephone numbers and IP addresses, as well as theexistence of the communications). The TBA also requires a telecommunications business
operator to, among other things, provide its service without unfair and discriminatory treatment
and, if a natural disaster, an accident or any other emergency occurs or is likely to occur, prioritisecommunications services which are necessary for: (i) prevention of the disaster or disaster relief
efforts; (ii) securing transportation, communications or electric power supplies; or (iii) maintaining
public order. If, among other things, the secrecy of communications handled by atelecommunications business operator is violated by any person, such person may be subject tocriminal sanctions. If, among other things, the secrecy of communications is not appropriately
maintained in connection with the operation of the telecommunications business, a
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APPENDIX G: GOVERNMENT REGULATIONS
telecommunications business operator does not satisfy the foregoing requirements, or its
business operations are otherwise inappropriate, such telecommunications business operator
may be subject to administrative action and/or criminal sanctions.
Specified Commercial Transactions Act of JapanThe Specified Commercial Transactions Act of Japan (the “SCTA”) regulates certain commercial
transactions of goods or services, including the sale and purchase of virtual items.
Pursuant to the SCTA, when a consumer purchases virtual items, the platform provider must
appropriately indicate on the order confirmation screen all information relating to the virtual items
as designated under the SCTA, including the quantity and price of virtual items, time and methodof payment, timing of delivery and termination, and cancellations and refunds. Such information
may also be indicated on a reference page which is clear and not misleading to the customers.
A person who fails to comply with this requirement will be subject to imprisonment for not morethan three years and/or a fine of not more than JPY3 million. If the representative, manager, agent,or employee of a corporation or an individual fails to comply with the obligation in relation to thebusiness of such corporation or individual, the corporation or individual will be separately subject
to a fine of not more than JPY100 million.
Act against Unjustifiable Premiums and Misleading Representations of Japan
The Act against Unjustifiable Premiums and Misleading Representations of Japan (the “Actagainst Unjustifiable Premiums”) restricts or prohibits certain acts by business operators in any
industries that may interfere with general consumers’ voluntary and rational decision-making by
inducing consumers to enter into transactions with such business operators for goods or services
through means of unjustifiable premiums and misleading representations. Pursuant to the Act
against Unjustifiable Premiums, business operators are generally subject to certain restrictions
and prohibitions on providing money or other economic gains as a means of inducing consumers
to enter into transactions for goods or services, as well as certain prohibitions on making
misleading statements to general consumers in connection with the transaction. Depending on thecircumstances, granting of points or rewards in games offered on a business operator’s platforms
may be considered as a means of inducing consumers to enter into transactions with suchbusiness operator for goods or services, and therefore may be subject to certain limitations andprohibitions under the Act against Unjustifiable Premiums. If a violation of such limitations or
prohibitions is committed by a business operator, the Japanese government may order thebusiness operator (or its successor thereof) to cease committing such violation or take measuresnecessary to prevent the reoccurrence of such violation, or, in relation to the implementation
thereof, make a public notification and take other necessary measures. If a corporation fails tocomply with the governmental order, the responsible officer or employee of such corporation who
violated the order, and the representative of the corporation, may be subject to imprisonment of
up to two years and/or a fine of up to JPY 3 million, and the corporation may be subject to a fineof up to JPY 300 million.
Pursuant to the Act against Unjustifiable Premiums, certain limitations and prohibitions are
imposed by the competent authority on the offering of premiums, including the maximum value ofpremiums, the total amount of premiums, the kind of premiums, or means of offering of thepremiums. For details on the potential risk of violation by the Target Group, please refer to
Section 16.1 titled “Risk Factors – Risks relating to Business and Industry of the Target Group –The Target Group’s live streaming platforms which enable its users to purchase the virtual points
to play online in-app games on its platforms may be adversely affected by changes to theregulation of gambling and gambling related activities under applicable laws” of this Circular.
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APPENDIX G: GOVERNMENT REGULATIONS
Act on the Limitation of Liability for Damages of Specified Telecommunication Service
Providers and the Right to Demand Disclosure of Identification Information of the Sendersof Japan
The Act on the Limitation of Liability for Damages of Specified Telecommunication Service
Providers and the Right to Demand Disclosure of Identification Information of the Senders ofJapan regulates the distribution of electronic information by communication service providers
publicly through the internet. If information distributed in connection with the services of theservice providers results in the infringement of rights of third parties, the service providers will be
required to disclose information relating to the person responsible for the infringement.
Act on Special Measures of the Civil Code Concerning Electronic Consumer Contracts andElectronic Acceptance Notice of Japan
The Act on Special Measures of the Civil Code Concerning Electronic Consumer Contracts andElectronic Acceptance Notice of Japan (the “Act on Special Measures of the Civil Code”)
provides special contract law rules for electronic consumer contracts in respect of certain
mistakes by consumers (typically, mis-click or mis-tap). Pursuant to the Act on Special Measuresof the Civil Code, after consumers execute an electronic contract with business operators,
consumers can claim invalidity of an online offer or acceptance on the basis of business operators’
error, even if the consumers were grossly negligent in making such offer or acceptance (suchdefence is not available under the Civil Code of Japan). However, if business operators have
implemented a measure that asks consumers to reconfirm their offer or acceptance (for example,
showing a pop-up window and asking for reconfirmation of acceptance), the defence will not be
available.
Installment Sales Act
The Installment Sales Act (the “ISA”) provides for the necessary measures to ensure the fairnessof transactions related to installment sales, etc., to prevent damages that purchasers may suffer,and to ensure the proper management of credit card numbers, as well as protect the interests ofpurchasers and achieve smooth distribution of goods and the smooth provision of services. The
ISA stipulates the obligations of the business for each type of contract category, i.e. installment
sales, loan-backed sales, intermediation of comprehensive credit purchase, and intermediation ofindividual credit purchases. Business operators (including the Target Group) handling credit card
information are obliged to take the measures (i) to prevent leakage, loss, or damage, and tootherwise properly manage credit card information and (ii) to prevent unauthorised use of credit
cards.
Payment Services Act of JapanA prepaid payment instruments issuer (the “Instrument Issuer”) must comply with certain
requirements pursuant to the Payment Services Act of Japan (the “PSA”), including obligations to:(i) (i) make a notification with (where such prepaid payment instruments can only be used topurchase goods or services offered by the issuer or its affiliates, such as the virtual points issued
by 17LIVE), or be registered with (where such prepaid payment instruments can be used topurchase goods or services offered by third parties), the director general of the competent local
finance bureau as a prepaid payment instruments issuer; (ii) make a notification of any change in
the notified or registered information, such as changes in the Instrument Issuer’s trade name;(iii) deposit or enter into certain guarantee or trust agreements for at least 50% of the total amountof unused balance of the prepaid payment instruments at the end of the first and third quarters of
every year, if such total amount is more than JPY10 million; (iv) refund the unused balance in the
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APPENDIX G: GOVERNMENT REGULATIONS
event the Instrument Issuer discontinues the business of issuing prepaid payment instruments orin other specified situations; (v) take certain measures for secure information management inconnection with the issuance of the prepaid payment instruments; (vi) provide certain information
to users; and (v) file a report to the regulator on the Instrument Issuer and the prepaid payment
instruments semi-annually. The Instrument Issuer may be subject to administrative action (such asa business improvement order and a business suspension order) and/or criminal sanctions in theevent of a violation of the PSA.
The Instrument Issuer must file a notification, rather than apply for registration, with the director
general of the competent local finance bureau of the Ministry of Finance if its prepaid payment
instruments can only be used to purchase goods or services that are offered by itself or its
affiliates, when the unused balance of the prepaid payment instruments exceeds JPY 10 million
at the end of the first or third quarter of any year. For details on the potential risk of violation by
the Target Group, please refer to Section 16.2 titled “Risk Factors – Risks relating to Doing
Business in Jurisdictions in which the Target Group operates – The Target Group may be subject
to licensing requirements and restrictions on foreign investment in jurisdictions in which it
operates” of this Circular.
Penal Code of JapanThe Penal Code of Japan prohibits gambling and running any place for gambling for profit.
Generally, gambling may be deemed to have taken place when at least two persons bet on an
outcome of a contest of chance for a prize of property or economic interest. A contest of chancedoes not constitute gambling if it is structured in a way such that neither participant will in any
event be able to lose property or economic interest as a result.
Act on Prevention of Transfer of Criminal Proceeds of Japan
Pursuant to the Act on Prevention of Transfer of Criminal Proceeds of Japan, financial institutions
and other business operators are required to perform customer identification, submit suspicioustransaction reports and maintain records of customer identification and transactions. A prepaid
payment instruments issuer is only required to submit suspicious transaction reports if it issues“high-value electronically transferable prepaid payment instruments” that can be used to purchasegoods or services offered by third parties. Given that the virtual points issued by the Target Groupcan only be used on 17LIVE, and cannot be used to purchase goods or services offered by third
parties, the Target Group is therefore not required to submit suspicious transaction reports under
the PSA.
Act on the Protection of Personal Information of Japan
The Act on the Protection of Personal Information of Japan (the “PPIA”) and its related guidelines
impose various requirements on businesses which collect, use or process personal information.
Pursuant to the PPIA, such businesses are required to lawfully use the personal information they
have collected in accordance with their stated purposes and take appropriate measures tomaintain the security of such information. Such businesses are also subject to restrictions withrespect to the provision of personal information to third parties. An amendment to the PPIA
effective from 30 May 2017 established a new regulatory authority and introduced new rules on
the handling of, and cross-border transfer of, personal information. A further amendment effectivefrom 1 April 2022 introduced new rules on the handling of personally identifiable information andpseudonymously processed the information and expanded protective measures applicable topersonal information and obligations of business operators handling personal information, which

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APPENDIX G: GOVERNMENT REGULATIONS
requires data breaches to be reported to the Personal Information Protection Commission, theJapanese administrative body with respect to the protection of personal information, and theaffected data subjects.
Act on the Establishment of Enhanced Environments for the Youths’ Safe and SecureInternet Use of Japan
In order to provide a safer internet environment to individuals who are under 18 years old(the “Minors”), the Act on the Establishment of Enhanced Environments for the Youths’ Safe andSecure Internet Use of Japan (the “Internet Safety Act”) regulates any person who provides, by
way of a publicly accessible server, services of making information available for public viewing via
the internet.
Pursuant to the Internet Safety Act, if information harmful to the sound growth of the Minors is
distributed on a service provider’s platform, the service provider shall endeavour to take actions
to prevent the Minors from accessing such information. The service provider shall also endeavour
to establish a reporting system for tips or enquiries from the public regarding any distribution ofpotentially harmful information on its platforms. In addition, when the service provider establishes
such system, it shall endeavour to keep records thereof.
Labour Standards Act and the Labour Contracts Act of Japan
Japanese labour-related laws including the Labour Standards Act and the Labour Contracts Act
of Japan generally provide employees with broad protection in relation to their employment
agreement, compensation, termination, working hours, holidays and rest days, and accident
compensation. In particular, termination of employees is strictly regulated in Japan, and adismissal which lacks objectively reasonable grounds or is against public policy or social norms
will likely constitute an abuse of power and therefore be declared invalid.
TaiwanForeign Exchange Regulation Act of Taiwan
Foreign exchange matters are generally governed by Foreign Exchange Regulation Act of Taiwan(the “Foreign Exchange Regulation Act”), which was last amended on 29 April 2009, andregulated by the Ministry of Finance of Taiwan and the Central Bank of the Republic of China(Taiwan) (the “Taiwan Central Bank”). The Taiwan Central Bank promulgated the Regulations
Governing the Declaration of Foreign Exchange Receipts and Disbursements or Transactions
effective from 26 December 2022, which regulate the declaration of foreign exchange receipts,
disbursements or transactions involving not less than NT$500,000 or its equivalent in foreign
currency.
Regulations Governing the Declaration of Foreign Exchange Receipts and Disbursementsor Transactions of Taiwan
Pursuant to the Regulations Governing the Declaration of Foreign Exchange Receipts andDisbursements or Transactions of Taiwan, foreign exchange must be approved by the Taiwan
Central Bank on a payment-by-payment basis. A single remittance by a Taiwan company with anamount exceeding US$1 million must be reported to the Taiwan Central Bank with supporting
documents, and remittances by a company with an annual aggregate amount of foreign exchange
purchased or sold exceeding US$50 million may not be processed without the approval of the
Taiwan Central Bank.
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APPENDIX G: GOVERNMENT REGULATIONS
Company Act of Taiwan
Except under limited circumstances, a Taiwan company is not permitted to distribute dividends ormake other distributions to shareholders in any given year for which it did not record net income
or retained earnings (excluding reserves). The Company Act of Taiwan (the “Company Act”) also
requires that 10% of annual net income (less prior years’ losses, if any, and applicable income
taxes) be set aside as a legal reserve until the accumulated legal reserve equals the paid-in
capital of such Taiwan company.
Statute for Investment by Foreign Nationals of Taiwan
Foreign Investments
Foreign investments in Taiwan are governed by the Statute for Investment by Foreign Nationals(the “FIL”), which was last amended on 19 November 1997. Foreign investors may invest in
Taiwan by way of subscription of shares issued by Taiwan companies, contribution to registeredcapital of Taiwan companies, establishment of branch offices, proprietary businesses orpartnerships, or provision of loans to Taiwan companies for a period of at least one year, as longas the industry the foreign investors seek to invest in is not listed in the negative list promulgatedby the Ministry of Economic Affairs of Taiwan (the “MOEA”), from time to time.
Financial Assistance from Offshore Entities
Pursuant to the FIL, an offshore entity may provide loans to a Taiwan company, as long as theoffshore entity does not hold any equity interest in the Taiwan company. There is no limit on theamount of loans a Taiwan company may receive from an offshore entity. There is also no limit on
the guarantee which may be provided by an offshore entity to a Taiwan company. However, if an
offshore entity has been recognised by the MOEA as a “foreign company”, it will be subject to therestrictions in Article 16 of the Company Act, which provides that a company shall not act as aguarantor of any nature, unless otherwise permitted by any other law or by the articles ofincorporation of the company.
ROC Act
Pursuant to the ROC Act, the investment in Taiwanese companies by PRC investors is subject tothe approval by the Taiwan government. The definition of “PRC investors” under the ROC Act does
not only include the entities incorporated under the laws of PRC and PRC individuals, but also
offshore entities (1) which are controlled by PRC entities or individuals; or (2) in which PRC
entities or individuals hold more than 30% of the ultimate beneficial ownership. Moreover, theTaiwan government has promulgated a “positive list”, which lists businesses or industries that areavailable for investment by PRC investors. PRC investors are prohibited from investing in any
businesses or industries that are outside of the scope of the “positive list”. In addition, a PRC
investor that is associated with the Communist Party of China, military, administrative or politicalagencies or institutions of the PRC will generally be restricted from investing in Taiwanesecompanies. Failure to comply with such requirements under the ROC Act will result in an
administrative fine ranging from NT$120,000 to NT$25,000,000 and corrective measures being
imposed by the competent authorities.

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APPENDIX G: GOVERNMENT REGULATIONSElectronic Signatures Act of Taiwan
Taiwan does not have a specific statute regulating the information technology sector. The relevant
regulations are mainly set out in the Electronic Signatures Act of Taiwan (the “Electronic
Signatures Act”) promulgated on 14 November 2001. The main purpose of the Electronic
Signatures Act is to encourage the use of electronic transactions, ensure the security of electronictransactions, and facilitate the development of electronic commerce. Pursuant to the Electronic
Signatures Act, unless otherwise restricted by law, documents may be maintained in electronic
form, and an electronic signature may be used with the consent of the other party.
Copyright Act, Patent Act, Trademark Act and Trade Secrets Act of Taiwan
Intellectual Property Rights
Intellectual property rights in Taiwan are protected primarily through the Copyright Act of Taiwan(last amended on 15 June 2022) (the “Copyright Act”), the Patent Act of Taiwan (last amended
on 4 May 2022), the Trademark Act of Taiwan (last amended on 24 May 2023), the Trade Secrets
Act of Taiwan (last amended on 15 January 2020) and the Integrated Circuit Layout Protection Act(last amended on 12 June 2002) in Taiwan.
Live Streaming Operations
Pursuant to the Copyright Act, a platform provider will not be liable for any copyright infringementby its users as long as it (i) removes or blocks access to the infringing content in accordance withthe requirements under the Copyright Act or other applicable laws; or (ii) in good faith, removes
or blocks access to the infringing content as soon as it becomes aware of such infringement.
However, if any of the employees of the platform provider infringes the copyright of third parties,
the platform provider may be jointly liable for such infringement if it fails to prove that it has
performed its duty of care in its supervision of employees.
Consumer Protection Act of Taiwan
Consumer Protection
Pursuant to Article 17 of the Consumer Protection Act of Taiwan (the “CPA”), competentauthorities may, by way of public gazette, announce requirements on standard contracts used bycompanies in certain designated industries, including mandatory and prohibitory provisions.
Contractual provisions contradictory to these requirements are null and void without affecting thevalidity of the remaining parts of the contract, unless the contract is clearly unconscionable to oneof the parties, in which case the entire contract will be null and void. Pursuant to Article 56-1 of
the CPA, if a company fails to rectify the non-compliance in its contractual provisions within the
period of time ordered by the competent authorities, an administrative fine ranging from
NT$30,000 to NT$300,000 may be imposed. If a company’s failure is continuous, a consecutive
administrative fine ranging from NT$50,000 to NT$500,000 may be imposed. The administrative
fine may be imposed repeatedly for further continuous failure to rectify the non-compliance.
Pursuant to Article 56-1 of the CPA, if a company fails to rectify the non-compliance in its
contractual provisions within the period of time ordered by the competent authorities, anadministrative fine ranging from NT$30,000 to NT$300,000 may be imposed. If a company’s
failure is continuous, a consecutive administrative fine ranging from NT$50,000 to NT$500,000
may be imposed. The administrative fine may be imposed repeatedly for further continuous failure
to rectify the non-compliance.
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APPENDIX G: GOVERNMENT REGULATIONSThe Ministry of Economic Affairs of Taiwan amended the Guidelines for Mandatory and Prohibited
Provisions in Online Games Standard Contract on 10 August 2022, which has been made effective
since 1 January 2023 (the “Guidelines”). Upon the inauguration of the Ministry of Digital Affairsof Taiwan (the “MODA”) on 27 August 2022, the MODA became the supervisory authority of online
games and it promulgated standard contract for online gaming services on 22 December 2022
(the “Model Contract”). Pursuant to the Guidelines, the following items should be set forth in thestandardised contracts entered into between a games provider and the consumers: the parties tothe contract (and their respective identifications), legal representative, termination right, payment
and the relevant matters, age rating of the games, hardware requirements, probability of winning
prizes or rewards, use of user’s account information and password, notification and process forbreach of user’s account or password, record keeping and the relevant matters, privacy provision,
digital records, quality of connection to the server(s), responsibilities of games provider andconsumer, management and rules of the games, violation of the said rules, remedy, amendment
to the contract, refund, cease of operations and jurisdiction. Furthermore, any games-related
advertisement or promotion provided to the consumer shall be deemed to form part of thecontract, as well as any fee schedule or rules provided or announced by the games provider. The
consumer may terminate the gaming contract within seven days after the using the games withoutcause and may request for full refund of any unused funds. The games provider or any of its
employees, agents or management staff of the gaming service shall not request the consumer toprovide his/her account password. The games provider shall keep the consumer’s account andthe relevant game records for a period of at least 30 days. The games provider shall also grant
access to consumer for his/her game records at a cost of no more than NT$200. If any
maintenance is required and the operation of the games will be paused, a seven-day prior publicannouncement should be made on the website and access page so the consumers will be deemed
informed. The games provider must establish fair and reasonable management rules for thegames, which shall be incorporated as part of the contract between the consumers and the games
provider. Any complaint with respect to the games and relevant matters that has been submitted
to the games provider shall be handled and responded to the consumers within 15 days. Any
proposed amendment to the contract between the games provider and consumers shall be
publicly announced before such amendment, and any amendment without such prior publicannouncement shall be null and void. In case that the games provider ceased a particular game,it shall notify the consumers, make full refund of the unused funds and make other reasonable
compensation to the consumers.
As a general rule, the CPA articles relating to the Model Contract (from Article 11 to Article 17-1)
would be applicable to the companies that adopt Model Contract in its operations relating toconsumers. These include the interpretation of the Model Contract, reasonable pre-execution
review period of the Model Contract (no more than 30 days), etc. In terms of any advertisements
or promotions of the online games, Articles 22 through 26 of CPA would also be applicable togovern the contents of such advertisements or promotions or other warranties to the consumers.
The online games providers are subject to the supervision of the competent authorities pursuant
to chapter 4 of the CPA. Lastly, any dispute between the online games providers against theconsumer shall be resolved pursuant to chapter 5 of the CPA, which includes administrativecomplaint, mediation and court proceeding process.
As of the Latest Practicable Date, it is unclear whether any or all of the Guidelines are applicable
to Target Group’s business. Pursuant to the CPA, the MODA has the discretion to amend the
Guidelines or the Model Contract promulgated under the Guidelines from time to time.

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APPENDIX G: GOVERNMENT REGULATIONSLive Commerce
Pursuant to the CPA, a business operator may be deemed as a “trader” by engaging in the design,
production, manufacture, import or distribution of goods, or provision of services. A trader isrequired to comply with the relevant provisions in the CPA in relation to its relationship with its
customers, including the requirements indicated in the mandatory or prohibitory provisions forcontract of adhesion of retail industries conducting e-commerce trading and the requirement fora 7-days’ return period.
Games
Pursuant to Article 6 of the Guidelines for Mandatory and Prohibited Provisions in Online Games
Standard Contract promulgated by the Ministry of Digital Affairs pursuant to the CPA, if the prizes
or rewards are granted to consumers based on chance, the ratio of winning chances shall be
disclosed to the consumers. Pursuant to Article 56 of the CPA, administrative fines ranging from
NT$50,000 to NT$500,000 may be imposed upon the failure to remedy any breach before theprescribed deadline after the competent authority’s order for remedy.
Digital Media Act
Taiwan regulatory authorities have drafted and announced the Digital Media Act. The Digital MediaAct has not been reviewed by the Legislative Yuan of Taiwan, and therefore, it is uncertain as towhen or whether such act will come into effect.
Digital media communication is defined under the Digital Media Act as the transmission of thesound, image, word, data or other information through cable, wireless, satellite, or any otherelectronic transmission device. Digital media communication service suppliers are subject tovarious disclosure obligations, including disclosure of business details, terms and conditions ofuse, privacy policy, and notice and complaint mechanism. Digital media communication service
providers are also required to establish a proper data security framework and are encouraged(but not obligated to) to establish or adopt necessary self-disciplined review and countermeasures
towards illegal content. If a provider fails to comply with these requirements leading to users
suffering losses, it may be subject to compensation claims from users or investigations fromcompetent authorities.
The Digital Media Act exempts internet service providers from the tort liabilities for information
generated by their users, if internet service providers were not aware of such infringement andhad taken proper remedial measures. However, tort liabilities in relation to copyright infringement
are only exempted when requirements under Articles 90-4 to 90-12 of Copyright Act are met.
Act Governing Electronic Payment Institutions of Taiwan
The Act Governing Electronic Payment Institutions, which was last amended on 19 January 2023
(the “Electronic Payment Act”) is applicable to persons who provide products or services
deemed as an “electronic payment account”, which means a payment instrument that accepts theregistration and account opening by users to keep track of their funds transfer and funds deposit
record through a network or electronic payment platform, and uses electronic equipment toconvey the receipt/payment information via connection, or a “stored value card”, which means aphysical or non-physical payment instrument in the form of a chip, card, or certificate with data
storage or computing functions that uses electronic, magnetic, or optical technology to store
monetary value.

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APPENDIX G: GOVERNMENT REGULATIONS
Pursuant to the Electronic Payment Act, an “electronic payment institution” means an institution
approved by the Financial Supervisory Commission to operate the following businesses:(i) collecting and making payments for real transactions as an agent, (ii) receiving stored funds,(iii) engaging in domestic and foreign small-amount remittance business; (iv) engaging in buying
and selling foreign currencies and currents issued by the PRC, Hong Kong, or Macau related tothe business stipulated in the preceding paragraphs; (v) providing contracted institution withintegrated service of payment related information communication; (vi) providing shared terminal
devices for contracted institutions; (vii) providing information communication between users andbetween users and contracted institutions; (viii) providing electronic invoices systems and related
value-added services; (ix) providing related services such as custody of payments for product(service) gift certificates and assistance for issuance, sales and underwriting; (x) providing reward
points integration and redeem payments for real transactions as an agent; (xi) providing storage
segmentations or applications in a stored value card to the others for use; (xii) providing theplanning, establishment, maintenance, or consulting services for information system andequipment related to the businesses specified in the preceding paragraphs; and (xiii) otherbusinesses approved by the competent authority. However, a company which only engages in thebusiness of collecting and making payments for real transactions as an agent and the totalbalance of funds it collects/pays and keeps does not exceed a daily average amount of
NT$2 billion in any given year is not considered an electronic payment institution.
Fair Trade Act of Taiwan
Pursuant to the Fair Trade Act of Taiwan (the “Fair Trade Act”), an enterprise who knows or shouldhave known that any statement made in a testimonial and endorsement advertisement is or may
be misleading or false but still allows the merchant to make such statement to public may be held
jointly liable with the merchant(s) making such statement, for any damages suffered by the
consumers. The Fair Trade Commission may order correction of the violation or suspension ofbusiness, and impose an administrative fine ranging from NT$50,000 to NT$25 million on suchenterprise. If such enterprise fails to take required remedial actions within the specified time
period, remedial orders and administrative fines ranging from NT$100,000 to NT$50 million may
be imposed repeatedly.
Further, the Fair Trade Act provides that an enterprise shall not permit misleading or false
advertisement of products or services, or advertisement of products or services which may
infringe the trademark or names of third parties, diminish competition, or otherwise harm fairtrade, on its platforms.
Money Laundering Control Act of Taiwan
Pursuant to the Money Laundering Control Act of Taiwan, which was last amended on 14 June
2023, a person engages in money laundering when he/she/it (i) knowingly disguises or conceals
the origin of the proceeds of specified unlawful activity, or transfers or converts the proceeds ofspecified unlawful activity to help others avoid criminal indictment; (ii) disguises or conceals thetrue nature, source, the movement, the location, the ownership, and the disposition or other rightsof the proceeds of specified unlawful activity; or (iii) accepts, obtains, possesses or uses theproceeds of specified unlawful activity committed by others.

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APPENDIX G: GOVERNMENT REGULATIONSRegulations Governing Anti-Money Laundering of Financial Institutions of Taiwan
Pursuant to the Regulations Governing Anti-Money Laundering of Financial Institutions of Taiwan,
online payment platforms are required to establish anti-money laundering internal control
systems, which must include internal control procedures to prevent money laundering and counter
terrorism financing, and file the details of such systems with the competent regulatory authority.
If a third party online payment platform fails to perform its anti-money laundering obligations, it
may be subject to administrative fines in accordance with the relevant regulations and/or
suspension or rescission of its licence.
Protection of Children and Youths Welfare and Rights Act of Taiwan
Live Streaming Operations
Pursuant to Article 46 of the Protection of Children and Youths Welfare and Rights Act of Taiwan,
as amended on 20 January 2021 (the “Children Protection Act”), internet platform providers are
required to adopt self-disciplinary regulations setting out protective measures to be taken toprevent harmful content being distributed to the Minors (under the age of 18). Upon notification to
the competent authority that certain content on their platform is harmful, or that no clear andworkable protective measures have been taken in accordance with the self-disciplinary
regulations, internet platform providers must limit the distribution and browsing of the harmful
content, or remove the harmful content from their platforms. Internet platform providers shall(i) observe the online behaviour of the Minors; (ii) implement a complaint reporting mechanism;(iii) implement a content classification regime; (iv) implement a content filtering system;(v) promote online safety for children and youths; and (vi) adopt self-disciplinary regulations andother preventive and protective measures. The Ministries of Health and Welfare, municipal
governments or county governments of Taiwan may impose an administrative fine ranging from
NT$60,000 to NT$300,000 on an internet platform provider who fails to remove the harmful
content and may order the internet platform providers to rectify the non-compliance within a
specified period. Continuous failure to rectify the non-compliance may result in repeated
enforcement action by the competent authority.
In addition, distribution or transmission of content that is harmful to children or youths’ mental or
physical health through the internet is prohibited. A person who fails to adopt any specific andfeasible protective measure or fails to comply with the protective mechanism set by the internet
platform supplier, thus exposing children or youths to such content, may receive an administrative
fine ranging from NT$100,000 to NT$500,000, and the Ministries of Health and Welfare, municipal
governments or county governments of Taiwan may also publish such person’s name and ordersuch person to cure such breach within a given period. A platform provider is also subject to therequirement of adopting specific and feasible protective measures. Continuous failure to rectify
the non-compliance may result in repeated enforcement action by the competent authority. In theevent of material violation, the business of the platform provider may be suspended for a periodof between one month and one year.
Games
Pursuant to the Game Software Rating Management Regulations promulgated pursuant to theChildren Protection Act, social gaming activities are subject to the classification requirements
provided therein. The content of the games included in the social gaming activities should not bein violation of provisions of other laws and regulations pursuant to Article 3 of the Game Software
Rating Management Regulations. The producer or distributor (whether by physical or electronic or
on-line method) should complete the rating or classification of the game software and disclose
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such information via a clearly identifiable method pursuant to Articles 10 to 14 of the Game
Software Rating Management Regulations. Additional procedural and documentation
requirements will apply for the rating/classification if the game is developed or funded by PRC
person. However, in the event of any violation of the Criminal Code, the producer or distributor ofa game software are not and will not be exempted from the criminal violation by completing therating or classification of such game software. Please refer to Appendix G titled “Government
Regulations – Taiwan – Criminal Code of Taiwan” of this Circular for further details.
Criminal Code of Taiwan
Pursuant to Article 266 of the Criminal Code of Taiwan (the “Criminal Code”), a person who
gambles in a public place or a place of gambling open to the public or via telecommunicationequipment, electronic communication, internet, or other similar means will be subject to a criminal
fine of no more than NT$50,000, unless the item that is subject to the gambling is one to provide
for temporary amusement, meaning that such item has a minor economic interest and can be
consumed instantly in the view of an average person, for example, a bowl of noodle or a bottle ofsoft drink. Article 268 of the Criminal Code further provides that a person who furnishes a place
to gamble or assembles persons to gamble with the intention to make profit shall be sentenced to
imprisonment for not more than three years, and may be subject to a criminal fine of not more than
NT$90,000. In addition, the earnings of illegal gambling are subject to forfeiture upon court order.
However, under the laws of Taiwan, social gaming activities are permitted, if the rewards gainedin the games cannot be converted into cash or cash equivalent. Please refer to Appendix G titled“Government Regulations – Taiwan – Protection of Children and Youths Welfare and Rights Act
of Taiwan – Games” of this Circular for further details.
Personal Information Protection Act of Taiwan
The Personal Data Protection Act of Taiwan last amended on 31 May 2023 (the “Taiwan PDPA”)
governs the collection, processing and use of personal information. Companies that collect,process or use personal information in Taiwan are required to disclose the name of the party
collecting the personal information and the purpose of collecting the personal information subject
to the data subject’s consent, as appropriate. Data subjects should also be informed of their rights
under the Taiwan PDPA and how they can exercise such rights. Failure to comply with the Taiwan
PDPA will give rise to fines and criminal liability. A non-government agency shall not collect orprocess specific personal information unless it is for a legitimate specific purpose and complies
with all of the conditions provided in the relevant laws. In addition, collection of sensitive personal
data is subject to additional, more stringent, requirements.
Companies are also required to establish a proper plan for data security and mechanism formonitoring inappropriate content distribution or other tortious acts in accordance with the Taiwan
PDPA or Children Protection Act. Please refer to Appendix G titled “Government Regulations –Taiwan – Protection of Children and Youths Welfare and Rights Act of Taiwan” of this Circular for
further details.
Labour Standards Act, Labour Pension Act, Labour Insurance Act, Employment Insurance
Act, Labour Occupational Accident Insurance and Protection Act and National Health
Insurance Law of Taiwan
Pursuant to the Labour Standards Act of Taiwan (the “Labour Standards Act”), which was last
amended on 10 June 2020, employers are not allowed to terminate employment contracts without
statutory cause or employer’s consent. Termination of employees as a result of a change of
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APPENDIX G: GOVERNMENT REGULATIONS
ownership of the employer is prohibited, unless (a) it meets the requirement under Article 11(1) of
the Labour Standards Act or (b) the employer is to be dissolved due to specified transactions
under the Business Mergers and Acquisitions Act.
Pursuant to the Labour Standards Act and the Labour Pension Act of Taiwan, employers are
required to contribute no less than six percent of an employee’s monthly salary into such
employee’s pension account. Pursuant to the Labour Insurance Act, the Employment Insurance
Act and the Labour Occupational Accident Insurance and Protection Act of Taiwan, employers are
required to withhold and pay for the applicable social insurance premium for employees. In
addition, pursuant to the National Health Insurance Law of Taiwan, employers are required to pay
for a certain statutory percentage of the employees’ health insurance premium.

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APPENDIX H: RULES OF THE COMPANY ESOP
17LIVE GROUP LIMITEDEMPLOYEE SHARE OPTION PLAN
17LIVE Group Limited, a Cayman Islands exempted company (the “Company”), sets forth
herein the terms and conditions of its Employee Share Option Plan (the “Plan”), as follows:
1.

PURPOSEThe Plan is intended to enhance the ability of the Company and its Affiliates (as defined herein)
to attract and retain highly-qualified employees, and Non-Employee Directors, and to motivate such
employees and Non-Employee Directors to serve the Company and its Affiliates and to expend
maximum effort to improve the business results and earnings of the Company, by providing to such
persons an opportunity to acquire or increase a direct proprietary interest in the operations and future
success of the Company through awards of Options, SARs, Restricted Shares, RSUs, other share-based
awards, and cash awards.
2.

DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award Agreements), thefollowing definitions shall apply:“Acquiror” shall have the meaning set forth in Section 15.2(ii).
“Affiliate” means an entity in which the Company has a controlling interest, directly or
indirectly through one or more intermediaries.
“Associate” shall have the meaning ascribed to it in the Listing Manual, and “Associates” shallbe construed accordingly.
“Award” means a grant, under the Plan, of an Option, SAR, Restricted Shares, RSU, Other
Stock-based Award or cash award.
“Award Agreement” means a written agreement (including an agreement transmitted
electronically) between the Company and a Grantee, or notice from the Company or an Affiliate to a
Grantee that evidences and sets out the terms and conditions of an Award.
“Board” means the Board of Directors of the Company.
“Cause” shall be defined as that term is defined in the Grantee’s offer letter or other applicable
employment agreement; or, if there is no such definition, “Cause” means, as determined by theCompany and unless otherwise provided in an applicable Award Agreement: (i) the Grantee’s willful
failure to perform his or her duties and responsibilities; (ii) the Grantee’s illegal conduct or grossmisconduct, in either case that is willful and results in material and demonstrable damage to the businessor reputation of the Company; (iii) the Grantee’s commission of any act of fraud, embezzlement,
dishonesty or willful misconduct; (iv) unauthorized use or disclosure by the Grantee of any proprietary
information of the Company or any Affiliate; or (v) Grantee’s willful breach of any of his or her
obligations under any agreement with the Company or any Affiliate. The Committee, in its absolute
discretion, shall determine the effect of all matters and questions relating to the existence of Cause.
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“Change in Control” shall mean, in the case of a particular Award, unless the applicable Award
Agreement states otherwise or contains a different definition of “Change in Control,” (i) any sale, lease,exchange or other transfer (in one transaction or a series of related transactions) of all or substantially allof the assets of the Company and its subsidiaries to an independent third party, (ii) the sale to or
acquisition by an independent third party of more than 50% of the outstanding shares of the Company,(iii) the approval by the holders of the outstanding voting power of the Company of a reorganization,
merger or consolidation of the Company, as a result of which an independent third party will own morethan 50% of the then outstanding combined voting power of the Company or (iv) the approval by theCompany’s shareholders of a complete liquidation or dissolution of the Company.
Solely to the extent required by Section 409A, an event described above shall not constitute a
Change in Control for purposes of the payment (but not vesting) terms and conditions of any Award thatis determined to be subject to Section 409A unless such event also constitutes a change in ownership or
effective control of the Company or a change in the ownership of a substantial portion of the Company’s
assets within the meaning of Section 409A (a “409A Change in Control Event”).
“Code” means the US Internal Revenue Code of 1986, as it may be amended from time to time.
Any reference to a section of the Code shall be deemed to include a reference to any valid and binding
governmental regulations, court decisions and other regulatory and judicial authority issued or
promulgated thereunder.
“Committee” means the remuneration committee of the Board. The Board shall cause theCommittee to satisfy the applicable requirements of any stock exchange on which the Common Stock
may then be listed.
“Company” shall have the meaning set forth in the preamble.
“Controlling Shareholder” shall have the meaning assigned to it in the Listing Manual, and“Controlling Shareholders” shall be construed accordingly.
“Disability” means “permanent and total disability” as set forth in Code Section 22(e)(3).
“Effective Date” means the date falling on or around 8 December 2023, or such other date as theBoard may determine.
“Fair Market Value” means, as of any date, the value of Shares determined as follows: (a) If
the Shares are listed on one or more established and regulated securities exchanges, national market
systems or automated quotation system on which Shares are listed, quoted or traded, Fair Market Value
shall be the closing sales price for such Shares (or the closing bid, if no sales were reported) as quoted
on the principal exchange or system on which the Shares are listed (as determined by the Committee) on
the date of determination (or, if no closing sales price or closing bid was reported on that date, asapplicable, on the last trading date such closing sales price or closing bid was reported), as reported in
The Wall Street Journal or such other source as the Committee deems reliable; (b) If the Shares are notlisted on an established securities exchange, national market system or automated quotation system, but
are regularly quoted by a recognized securities dealer, Fair Market Value shall be the closing sales pricefor such shares as quoted by such securities dealer on the date of determination, but if selling prices are
not reported, the Fair Market Value of a Share shall be the mean between the high bid and low asked
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APPENDIX H: RULES OF THE COMPANY ESOP
prices for the Shares on the date of determination (or, if no such prices were reported on that date, on thelast date such prices were reported), as reported in The Wall Street Journal or such other source as theCommittee deems reliable; or (c) In the absence of an established market for the Shares of the typedescribed in (a) and (b), above, the Fair Market Value shall be determined by the Committee in goodfaith and in its discretion by reference to (i) the placing price of the latest private placement of the
Shares and the development of the Company’s business operations and the general economic and market
conditions since such latest private placement, (ii) other third party transactions involving the Shares andthe development of the Company’s business operation and the general economic and market conditions
since such sale, (iii) an independent valuation of the Shares, or (iv) such other methodologies orinformation as the Committee determines to be indicative of Fair Market Value.
“Family Member” means a person who is a spouse, former spouse, child, stepchild, grandchild,parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-inlaw, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the applicable
individual, any person sharing the applicable individual’s household (other than a tenant or employee), a
trust in which any one or more of these persons have more than 50% of the beneficial interest, afoundation in which any one or more of these persons (or the applicable individual) control the
management of assets, and any other entity in which one or more of these persons (or the applicable
individual) own more than 50% of the voting interests.
“Grantee” means a person who receives or holds an Award under the Plan.
“Incentive Stock Option” means an Option that is an “incentive stock option” within themeaning of Code Section 422.
“Issued Share” means, collectively, all outstanding Shares issued pursuant to Awards.
“Listing Manual” means the Listing Manual of the SGX-ST.
“Non-Employee Director” means a member of the Board who is not an employee.
“Nonstatutory Stock Option” means an Option that is not an Incentive Stock Option.
“Option” means an option to purchase one or more Shares under the Plan, including an Incentive
Stock Option and a Nonstatutory Stock Option.
“Option Price” means the exercise price for each Share subject to an Option.
“Other Share-based Award” means Awards consisting of Share units, or other Awards, valued
in whole or in part by reference to, or otherwise based on, Shares, other than Options, SARs, Restricted
Stock and RSUs.
“Plan” shall have the meaning set forth in the preamble.
“Purchase Price” means the purchase price for each Share under a grant of Restricted Stock.
“Restricted Period” shall have the meaning set forth in Section 10.1.
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“Restricted Stock” means restricted Shares awarded to a Grantee under Section 10.
“Restricted Stock Unit” or “RSU” means a bookkeeping entry representing the equivalent of
Shares, awarded to a Grantee under Section 10.
“SAR” means a right granted to a Grantee under Section 9.
“SAR Exercise Price” means the per Share exercise price of a SAR granted under Section 9.
“Section 409A” means Code Section 409A.
“Separation from Service” means the termination of the applicable Grantee’s employment with,and performance of services for, the Company and each Affiliate. Unless otherwise determined by theCompany, if a Grantee’s employment or service with the Company or an Affiliate terminates but the
Grantee continues to provide services to the Company or an Affiliate in a non-employee director
capacity or as an employee or officer, as applicable, such change in status shall not be deemed a
Separation from Service. Approved temporary absences from employment because of illness, vacation,or leave of absence and transfers among the Company and its Affiliates shall not be considered
Separations from Service. Notwithstanding the foregoing, with respect to any Award that constitutes
nonqualified deferred compensation under Section 409A, “Separation from Service” shall mean a“separation from service” as defined under Section 409A.
“Service Provider” means an employee or Non-Employee Director of the Company or an
Affiliate.
“Share” means an ordinary share of the Company.
"SGX-ST" means the Singapore Exchange Securities Trading Limited.
“Substitute Award” means any Award granted in assumption of or in substitution for an award
of a company or business acquired by the Company or an Affiliate or with which the Company or an
Affiliate combines.
“Ten Percent Shareholder” means an individual who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company, its parent or any of its
subsidiaries. In determining stock ownership, the attribution rules of Code Section 424(d) shall beapplied.
“Termination Date” means the date that is ten (10) years after the Effective Date, unless thePlan is earlier terminated by the Board under Section 5.2.
“U.S.” means the United States of America, its territories and possessions, any state of theUnited States and the District of Columbia.
3.

ADMINISTRATION OF THE PLAN

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3.1.

GeneralThe Plan will be administered by the Committee, as delegate of the Board. All determinations
and decisions made by the Committee pursuant to the Plan will be final, conclusive and binding on all
persons and will be given the maximum deference permitted by law. To the extent permitted byapplicable law, the Board shall have the power and authority to delegate its powers and responsibilities
hereunder to the Committee, which shall have full authority to act in accordance with its charter (as ineffect from time to time), and with respect to the authority of the Board to act hereunder. All references
to the Board shall be deemed to include a reference to the Committee, to the extent such power or
responsibilities of the Board have been delegated; provided that the Board shall retain the right toexercise the authority of the Committee to the extent consistent with applicable law and the applicablerequirements of any securities exchange on which the Shares may then be listed.
3.2.

Committee Composition

The Board may elect one or more officers or directors to sit on the Committee at its sole discretion.
Each such officer or director will not be excluded from participating in the Plan if otherwise eligible, but
he or she may not act on or pass any matters pertaining specifically to his or her own benefit or
eligibility under the Plan. The Board or a committee of the Board will act on any matters pertaining
specifically to the benefit or eligibility of such officer under the Plan.
3.3.

Authority of Board

Except as specifically provided in Section 14 or as otherwise may be required by applicable law,regulatory requirement, or the articles of incorporation or the bylaws of the Company, the Board shallhave full power and authority to take all actions and to make all determinations required or provided forunder the Plan, any Award or any Award Agreement, and shall have full power and authority to take allsuch other actions and make all such other determinations, including determinations of fact, notinconsistent with the specific terms and conditions of the Plan that the Board deems to be necessary or
appropriate to the administration of the Plan. The interpretation and construction by the Board of thePlan, any Award, or any Award Agreement shall be final, binding, and conclusive. Without limitation,
the Board shall have full and final authority, subject to the other terms and conditions of the Plan, to:(i)construe and interpret the Plan and apply its provisions;(ii)

designate Grantees;(iii)

determine the type or types of Awards to be made to a Grantee and the applicable Grant
Date;

(iv)

determine the number of Shares to be subject to an Award;(v)

establish the terms and conditions of each Award (including, but not limited to, theOption Price of any Option, the nature and duration of any restriction or condition (orprovision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of anAward or the Shares subject thereto, and any terms or conditions that may be necessary toqualify Options as Incentive Stock Options);
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APPENDIX H: RULES OF THE COMPANY ESOP
(vi)

prescribe the form of each Award Agreement;(vii)

amend, modify, or supplement the terms and conditions of any outstanding Award,
including the authority, in order to effectuate the purposes of the Plan, to modify Awards
to foreign nationals or individuals who are employed outside the United States torecognize differences in local law, tax policy, or custom;(viii)

promulgate, amend and rescind rules and regulations relating to the administration of the
Plan;

(ix)

to authorize any person to execute, on behalf of the Company, any instrument required tocarry out the purposes of the Plan; and(x)to modify the Option Price or SAR Exercise Price of any outstanding Option or SAR,
provided that if the modification effects a repricing, shareholder approval shall be
required before the repricing is effective.

Any or all of the provisions of the Plan may be modified from time to time and at any
time, by a resolution of the Board, except that any modification which would be to the advantage
of Grantees under the Plan, such as the repricing of the Option Price and the replacement ofexisting Options, shall be subject to the prior approval of shareholders of the Company in a
general meeting.
3.4.

Separation from Service for Cause; Clawbacks
3.4.1. Separation from Service for Cause
The Company may annul an Award if the Grantee incurs a Separation from Service forCause.
3.4.2. Clawbacks
All awards, amounts, or benefits received or outstanding under the Plan shall be subject
to clawback, cancellation, recoupment, rescission, payback, reduction, or other similar action inaccordance with any Company clawback or similar policy (“Clawback Policy”) or any
applicable law related to such actions. In addition, a Grantee may be required to repay to theCompany previously paid compensation, whether provided pursuant to the Plan or an Award
Agreement in accordance with the Clawback Policy. A Grantee’s acceptance of an Award shallbe deemed to constitute the Grantee’s acknowledgement of and consent to the Company’s
application, implementation, and enforcement of any applicable Company clawback or similar
policy that may apply to the Grantee, whether adopted before or after the Effective Date andwhether before or after the Grant Date of an Award, and any applicable law relating to clawback,cancellation, recoupment, rescission, payback, or reduction of compensation, and the Grantee’s
agreement that the Company may take any actions that may be necessary to effectuate any suchpolicy or applicable law, without further consideration or action.

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3.5.

Deferral Arrangement

The Board may permit or require the deferral of any Award payment into a deferredcompensation arrangement, subject to such rules and procedures as it may establish and in accordancewith Section 409A, which may include terms and conditions for the payment or crediting of interest or
dividend equivalents, including converting such credits into deferred units.
3.6.

No Liability

No member of the Board or the Committee shall be liable for any action or determination madein good faith with respect to the Plan, any Award, or Award Agreement.
3.7.

Book Entry

Notwithstanding any other term or condition of the Plan to the contrary, the Company may electto satisfy any requirement under the Plan for the delivery of stock certificates through the use of bookentry.
3.8.

Eligibility of Grantees

The following persons are eligible to participate in the Plan, at the absolute discretion of theCommittee:(i)highly qualified employees who hold such rank as may be designated by the Committee
from time to time;(ii)

Non-Employee Directors of the Company;(iii)

Controlling Shareholders and their Associates, who satisfy the eligibility criteria set out
in Section 3.8(i) and (ii) above.

Controlling Shareholders and their Associates who satisfy the criteria set out in Section 3.8(i)and (ii) above shall be eligible to participate in the Plan provided that:(a)their participation; and(b)the actual or maximum number of Shares and terms of any Options to be granted to them,

have been approved by independent shareholders of the Company at a general meeting inseparate resolutions for each such person and, in respect of each such person, in separate resolutions foreach of (i) his participation; and (ii) the actual or maximum number of Shares and terms of any Options
to be granted to him, provided always that it shall not be necessary to obtain the approval of the
independent shareholders for the participation in the Plan of a Controlling Shareholders or their
Associate who is, at the relevant time, already a Grantee.

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APPENDIX H: RULES OF THE COMPANY ESOP4.

SHARES SUBJECT TO THE PLAN
4.1.

Authorized Number of Shares

Subject to adjustment under Section 15, the total number of Shares authorized to be issued
pursuant to Awards awarded under the Plan shall not exceed 2,114,891 Shares or such other number of
Shares as may be authorized by the Board or the Committee (if so designated by the Board), which shallnot, in any event, exceed 15.0% of the total number of issued Shares (excluding Shares held by theCompany as treasury shares, if any) when aggregated with (a) the total number of Shares issued and/or
to be issued pursuant to Awards already awarded under the Plan; and (b) the aggregate number of Shares
over which options or awards are granted under any other share option scheme or share schemes of theCompany. Shares issued under the Plan shall consist in whole or in part of authorized but unissued
Shares, treasury Shares, or Shares purchased on the open market or otherwise, all as determined by theCompany from time to time. All of the Shares available under this 4.1 shall be available for issuanceunder Incentive Stock Options.
The aggregate number of Shares which may be issued pursuant to Awards awarded under thePlan to Grantees who are Associates of Controlling Shareholders shall not exceed 25.0% of the total
number of Shares available under the Plan preceding the grant of the relevant new Shares.
The aggregate number of Shares which may be issued pursuant to Awards awarded under thePlan to each Grantee who is an Associate of a Controlling Shareholder shall not exceed 10.0% of thetotal number of Shares available under the Plan preceding the grant of the relevant new Shares.
4.2.

Share Counting
4.2.1. General

Each Share granted in connection with an Award shall be counted as one Share against
the limit in Section 4.1, subject to this Section 4.2.
4.2.2. Cash-Settled Awards
Any Award settled in cash shall be counted as Shares for all purposes under the Plan, andshall not be available for grant again under the Plan.
4.2.3. Expired or Terminated Awards
If any Award under the Plan expires, or is terminated, surrendered, or forfeited, in whole
or in part, the unissued Shares covered by such Award shall again be available for the grant ofAwards.
4.2.4. Repurchased, Surrendered, or Forfeited Awards
If Issued Shares are repurchased by, or are surrendered or forfeited to the Company at no
more than cost, such Shares shall again be available for the grant of Awards.

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APPENDIX H: RULES OF THE COMPANY ESOP
4.2.5. Payment of Option Price or Tax Withholding in Shares
Notwithstanding anything to the contrary contained herein: Shares subject to an Award
under the Plan shall not again be made available for issuance or delivery under the Plan if such
Shares are (i) Shares tendered in payment of an Option, (ii) Shares delivered or withheld by theCompany to satisfy any tax withholding obligation, (iii) Shares covered by a Share-settled SARor other Shares that were not issued upon the settlement of the SAR.
4.2.6. Substitute Awards
In the case of any Substitute Award, such Substitute Award shall not be counted against
the number of Shares reserved under the Plan.
5.

EFFECTIVE DATE, DURATION, AND AMENDMENTS
5.1.

Term

The Plan shall be effective as of the Effective Date, provided that it has been approved by theCompany’s shareholders. The Plan shall terminate automatically on the ten-year anniversary of theEffective Date and may be terminated on any earlier date as provided in Section 5.2.
5.2.

Amendment and Termination of the Plan

The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to
any Awards which have not been made. An amendment shall be contingent on approval of theCompany’s shareholders to the extent stated by the Board, required by applicable law, or required byapplicable securities exchange listing requirements. No Awards may be granted after the Termination
Date. The applicable terms and conditions of the Plan, and any terms and conditions applicable toAwards granted before the Termination Date shall survive the termination of the Plan and continue toapply to such Awards. No amendment, suspension, or termination of the Plan shall, without the consent
of the Grantee, materially impair rights or obligations under any Award theretofore awarded.
6.

AWARD ELIGIBILITY AND LIMITATIONS
6.1.

Service Providers

Awards may be made to any Service Provider, as the Board may determine and designate fromtime to time, in its discretion, subject to Section 3.8 and Section 8.7 in the case of an Incentive Stock
Option. The Board may grant an Award to a person who is reasonably expected to become a Service
Provider provided that such grant is contingent upon such person becoming a Service Provider.
6.2.

Successive Awards

Service Providers may receive more than one Award, subject to such restrictions as are provided
herein.

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APPENDIX H: RULES OF THE COMPANY ESOP
6.3.

Stand-Alone, Additional, Tandem, and Substitute Awards

The Board may grant Awards either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of the Company, any Affiliate,
or any business entity to be acquired by the Company or an Affiliate, or any other right of a Grantee toreceive payment from the Company or any Affiliate. Such additional, tandem, substitute or exchangeAwards may be granted at any time. If an Award is granted in substitution or exchange for anotherAward, the Board shall have the right to require the surrender of such other Award in consideration for
the grant of the new Award. Subject to Section 3.3(ix), and the requirements of applicable law, theBoard shall have the right, in its discretion, to make Awards in substitution or exchange for any otheraward under another plan of the Company, any Affiliate, or any business entity to be acquired by theCompany or an Affiliate. In addition, Awards may be granted in lieu of cash compensation, including inlieu of cash amounts payable under other plans of the Company or any Affiliate, in which the value of
Shares subject to the Award is equivalent in value to the cash compensation (for example, RSUs or
Restricted Stock).
7.

AWARD AGREEMENT

Each Award shall be evidenced by an Award Agreement, in such form or forms as the Board
shall from time to time determine. Without limiting the foregoing, an Award Agreement may beprovided in the form of a notice that provides that acceptance of the Award constitutes acceptance of allterms and conditions of the Plan and the notice. Award Agreements granted from time to time or at thesame time need not contain similar terms and conditions but shall be consistent with the terms andconditions of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether
such Options are intended to be Nonstatutory Stock Options or Incentive Stock Options, and in theabsence of such specification such options shall be deemed Nonstatutory Stock Options.
8.

TERMS AND CONDITIONS OF OPTIONS
8.1.

Option Price

The Option Price of each Option shall be fixed by the Board and stated in the related Award
Agreement. Each Option shall be separately designated in the Award Agreement as either an Incentive
Stock Option or Nonqualified Option if it is awarded to a Grantee who is a U.S. citizen or U.S. resident
with U.S. source income. The Option Price of each Option (except those that constitute SubstituteAwards) shall be at least the Fair Market Value of a Share on the trading date immediately preceding theGrant Date; provided, however, that in the event that a Grantee is a Ten Percent Shareholder as of theGrant Date, the Option Price of an Option granted to such Grantee that is intended to be an Incentive
Stock Option shall be not less than 110% of the Fair Market Value of a Share on the Grant Date. In nocase shall the Option Price of any Option be less than the par value of a Share or at a discount to the Fair
Market Value of a Share on the trading date immediately preceding the Grant Date.
8.2.

Vesting

Subject to Section 8.3, each Option shall become exercisable at such times and under such terms
and conditions (including, without limitation, performance requirements) as may be determined by the
Board and stated in the Award Agreement, provided that the Options may be exercisable only after one
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APPENDIX H: RULES OF THE COMPANY ESOP
year from the date of grant. No Option may be exercised for a fraction of a Share. The Board may, butshall not be required to, provide for an acceleration of vesting and exercisability in the terms of any
Award Agreement upon the occurrence of a specified event.
8.3.

Term

Each Option shall terminate, and all rights to purchase Shares thereunder shall cease, upon the
expiration of the Option term determined by the Board and stated in the Award Agreement not to exceed
ten years from the Grant Date, or under such circumstances and on any date before ten years from theGrant Date as may be set forth in the Plan or as may be fixed by the Board and stated in the relatedAward Agreement; provided, however, that in the event that the Grantee is a Ten Percent Shareholder,an Option granted to such Grantee that is intended to be an Incentive Stock Option at the Grant Dateshall not be exercisable after the expiration of five years from its Grant Date.
8.4.

Limitations on Exercise of Option

Notwithstanding any other term or condition of the Plan, in no event may any Option be
exercised, in whole or in part after the occurrence of an event which results in termination of the Option.
8.5.

Method of Exercise

An Option, save for those granted at a discount, is exercisable after one year from the date of
grant. An Option that is exercisable may be exercised by the Grantee’s delivery of a notice of exercise to
the Company, setting forth the number of Shares with respect to which the Option is to be exercised,accompanied by full payment for the Shares. To be effective, notice of exercise must be made inaccordance with procedures established by the Company from time to time.
8.6.

Rights of Holders of Options

Unless otherwise stated in the related Award Agreement, an individual holding or exercising an
Option shall have none of the rights of an shareholder (for example, the right to receive cash or dividend
payments or distributions attributable to the subject Shares or to direct the voting of the subject Shares)
until the Shares covered thereby are fully paid and issued to him or her. Except as provided in
Section 15 or the related Award Agreement, no adjustment shall be made for dividends, distributions, orother rights for which the record date is before the date of such issuance.
8.7.

Limitations on Incentive Stock Options

An Option shall constitute an Incentive Stock Option only (i) if the Grantee of the Option is an
employee of the Company or any Affiliate; (ii) to the extent specifically provided in the related Award
Agreement; and (iii) to the extent that the aggregate Fair Market Value (determined at the time the
Option is granted) of the Shares with respect to which all Incentive Stock Options held by such Grantee
become exercisable for the first time during any calendar year (under the Plan and all other plans of theGrantee’s employer and its Affiliates) does not exceed $100,000. This limitation shall be applied bytaking Options into account in the order in which they were granted. No Option shall be treated as an
Incentive Stock Option unless such Option complies with Code Section 422.

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APPENDIX H: RULES OF THE COMPANY ESOP9.

TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS (SARs)
9.1.

Right to Payment

A SAR shall confer on the Grantee a right to receive, upon exercise thereof, the excess of (i) the
Fair Market Value of one Share on the date of exercise over (ii) the SAR Exercise Price. No payment
will be made if the Fair Market Value on the date of exercise is below the SAR Exercise Price. The
Award Agreement for a SAR (except those that constitute Substitute Awards) shall specify the SAR
Exercise Price, which shall be fixed on the Grant Date as not less than the Fair Market Value of a Shareon that date. SARs may be granted alone or in conjunction with all or part of an Option or at any
subsequent time during the term of such Option or in conjunction with all or part of any other Award. A
SAR granted in tandem with an outstanding Option after the Grant Date of such Option shall have a
SAR Exercise Price that is equal to the Option Price; provided, however, that the SAR Exercise Price
may not be less than the Fair Market Value of a Share on the Grant Date of the SAR to the extent
required by Section 409A.
9.2.

Other Terms

The Board shall determine at the grant date, or thereafter, the time or times at which and thecircumstances under which a SAR may be exercised in whole or in part (including based onachievement of performance goals and/or future service requirements), the time or times at which SARs
shall cease to be or become exercisable after Separation from Service or upon other terms or conditions,the method of exercise, whether or not a SAR shall be in tandem or in combination with any otherAward, and any other terms and conditions of any SAR.
9.3.

Term of SARs

The term of a SAR granted under the Plan shall be determined by the Board, in its sole
discretion, and stated in the related Award Agreement; provided, however, that such term shall not
exceed ten years.
9.4.

Payment of SAR Amount

The Payment for the SAR may be settled in cash or in Shares, as determined by the Committee
and set forth in the Award Agreement. The Committee will consider settlement of the SAR in cash only
if (i) there are legal or regulatory prohibitions around the issue of Shares to a Grantee and (ii) the
financial position of the Company permits the settlement of the SAR in cash, including whether theCompany in a net positive cash flow statement at such time an SAR is being exercised or purchased. For
the avoidance of doubt, any SAR that is settled in cash shall not be available for grant again under thePlan. Upon exercise of a SAR, a Grantee shall be entitled to receive payment from the Company (in cashor Shares) in an amount determined by multiplying:(i)the excess of the Fair Market Value of a Share on the date of exercise over the SAR
Exercise Price; by(ii)

the number of Shares with respect to which the SAR is exercised.

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APPENDIX H: RULES OF THE COMPANY ESOP10.

TERMS AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCKUNITS (RSUs)
10.1. Restrictions

At the time of grant, the Board may, in its sole discretion, establish a period of time (a“Restricted Period”) and any additional restrictions including the satisfaction of corporate or individual
performance objectives applicable to an Award of Restricted Stock or Restricted Stock Units. EachAward of Restricted Stock or RSUs may be subject to a different Restricted Period and additional
restrictions. Neither Restricted Stock nor RSUs may be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of during the Restricted Period or prior to the satisfaction of any otherapplicable restrictions.
10.2. Restricted Stock Certificates
The Company shall issue, in the name of each Grantee to whom Restricted Stock have been
granted, stock certificates or other evidence of ownership representing the total number of Restricted
Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date. The Board may
provide in an Award Agreement that either (i) the Secretary of the Company shall hold such certificates
for the Grantee’s benefit until such time as the Restricted Stock is forfeited to the Company or the
restrictions lapse, or (ii) such certificates shall be delivered to the Grantee; provided, however, that suchcertificates shall bear a legend or legends that comply with any applicable securities laws andregulations and make appropriate reference to the restrictions imposed under the Plan and the Award
Agreement.
10.3. Rights of Holders of Restricted Stock
Unless the Board otherwise provides in an Award Agreement and subject to Section 17.10,
holders of Restricted Stock shall have rights as shareholders, including voting and dividend rights.
10.4. Rights of Holders of RSUs
10.4.1. Settlement of RSUs
RSUs may be settled in cash or Shares, as determined by the Board and set forth in theAward Agreement. For the avoidance of doubt, any RSU that is settled in cash shall not be
available for grant again under the Plan. The Award Agreement shall also set forth whether the
RSUs shall be settled (i) within the time period specified for “short term deferrals” under
Section 409A or (ii) otherwise within the requirements of Section 409A, in which case theAward Agreement shall specify upon which events such RSUs shall be settled.
10.4.2. Voting and Dividend Rights
Unless otherwise stated in the applicable Award Agreement and subject to Section 17.10,
holders of RSUs shall not have rights as shareholders, including no voting or dividend or
dividend equivalents rights.

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APPENDIX H: RULES OF THE COMPANY ESOP
10.4.3. Creditor’s Rights
A holder of RSUs shall have no rights other than those of a general creditor of theCompany. RSUs represent an unfunded and unsecured obligation of the Company, subject to theapplicable Award Agreement.
10.5. Purchase of Restricted Stock
The Grantee shall be required, to the extent required by applicable law, to purchase Restricted
Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate par value of the
Shares represented by such Restricted Stock or (ii) the Purchase Price, if any, specified in the relatedAward Agreement, provided always that the Purchase Price shall not be at a discount exceeding 20% of
the Fair Market Value of the Shares on the trading date immediately preceding the Grant Date. The
Purchase Price shall be payable in a form described in Section 11. In no case shall the Purchase Price beless than the par value of a Share.
10.6. Delivery of Stock
Upon the expiration or termination of any Restricted Period and the satisfaction of any otherterms and conditions prescribed by the Board, the restrictions applicable to Restricted Stock or RSUs
settled in Shares shall lapse, and, unless otherwise provided in the Award Agreement, a stock certificate
for such Shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee’s
beneficiary or estate, as the case may be.
11.

FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
11.1. General Rule

Payment of the Option Price for an Option or the Purchase Price for Restricted Stock shall bemade in cash or in cash equivalents acceptable to the Company, except as provided in this Section 11.
11.2. Surrender of Shares
To the extent the Award Agreement so provides, payment of the Option Price for Sharespurchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be madeall or in part through the tender to, or withholding by, the Company of Shares that shall be valued, forpurposes of determining the extent to which the Option Price or Purchase Price for Restricted Stock has
been paid thereby, at their Fair Market Value on the date of exercise or surrender. Notwithstanding theforegoing, in the case of an Incentive Stock Option, the right to make payment in the form of alreadyowned Shares may be authorized only at the time of grant.
11.3. Cashless Exercise
With respect to an Option only (and not with respect to Restricted Stock), to the extent permitted
by law and to the extent the Award Agreement so provides, payment of the Option Price may be madeall or in part by delivery (on a form acceptable to the Company) of an irrevocable direction to a licensed
securities broker acceptable to the Company to sell Shares and to deliver all or part of the sales proceeds
to the Company in payment of the Option Price and any withholding taxes described in Section 17.3.
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APPENDIX H: RULES OF THE COMPANY ESOP11.4. Other Forms of Payment
To the extent the Award Agreement so provides, payment of the Option Price or the Purchase
Price for Restricted Stock may be made in any other form that is consistent with applicable laws,
regulations, and rules, including the Company’s withholding of Shares otherwise due to the exercising
Grantee.
12.

TERMS AND CONDITIONS OF PERFORMANCE AWARDS

The right of a Grantee to exercise or receive a grant or settlement of any Award, and the timing
thereof, may be subject to such performance conditions as may be specified by the Board which shall
include, but is not limited to, his rank, job performance, years of service, potential for future
development, future contribution to the success and development of the Company and the extent ofeffort and difficulty with which the performance conditions may be achieved. The Board may use suchbusiness criteria and other measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce the amounts payable under any Award
subject to performance conditions.
13.

OTHER SHARE-BASED AWARDS
13.1. Grant of Other Stock-based Awards

Other Stock-based Awards may be granted either alone or in addition to or in conjunction withother Awards. Other Stock-based Awards may be granted in lieu of other cash or other compensation towhich a Service Provider is entitled from the Company or may be used in the settlement of amounts
payable in Shares under any other compensation plan or arrangement of the Company. Subject to theterms and conditions of the Plan, the Board shall have the sole and complete authority to determine thepersons to whom and the time or times at which such Awards may be made, the number of Shares to be
granted under such Awards, and all other terms and conditions of such Awards. Unless the Board
determines otherwise, any such Award shall be confirmed by an Award Agreement, which shall containsuch terms and conditions as the Board determines to be necessary or appropriate to carry out the intent
of the Plan with respect to such Award.
13.2. Terms of Other Share-based Awards
Any Shares subject to Awards made under this Section 13 may not be sold, assigned, transferred,pledged, or otherwise encumbered before the date on which the Shares are issued, or, if later, the date on
which any applicable restriction, performance, or deferral period lapses.
14.

REQUIREMENTS OF LAW

The Company shall not be required to sell or issue any Shares under any Award if the sale orissuance of such Shares would constitute a violation by the Grantee, any other individual, or theCompany of any law or regulation of any governmental authority, including any applicable securities
laws or regulations. If at any time the Company determines that the listing, registration, or qualificationof any Shares subject to an Award upon any securities exchange or under any governmental regulatory
body is necessary or desirable as a term or condition of, or in connection with, the issuance or purchaseof Shares hereunder, no Shares may be issued or sold to the Grantee or any other individual exercising
15802140214.11

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APPENDIX H: RULES OF THE COMPANY ESOPan Option unless such listing, registration, qualification, consent or approval shall have been effected or
obtained free of any terms and conditions not acceptable to the Company, and any delay caused thereby
shall in no way affect the date of termination of the Award. The Company shall not be obligated to takeany affirmative action in order to cause the exercise of an Option or the issuance of Shares under thePlan to comply with any law or regulation of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option shall not be exercisable until the Shares covered bysuch Option are registered or are exempt from registration, the exercise of such Option (undercircumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon theeffectiveness of such registration or the availability of such an exemption. The Board may require theGrantee to sign such additional documentation, make such representations, and furnish such information
as the Board may consider appropriate in connection with the grant of Awards or issuance or delivery of
Shares in compliance with applicable laws.
15.

EFFECT OF CHANGES IN CAPITALIZATION
15.1. Changes in Equity

If (i) the number of outstanding Shares is increased or decreased or the Shares are changed intoor exchanged for a different number or kind of shares or other securities of the Company on account of
any rights issue, capital reduction, recapitalization, reclassification, stock split or sub-division, reverse
split, consolidation of shares, exchange of shares, stock dividend or other distribution payable in capitalstock, or other increase or decrease in such Shares effected without receipt of consideration by theCompany occurring after the Effective Date or (ii) there occurs any spin-off, split-up, extraordinary cash
dividend, or other distribution of assets by the Company, (A) the number and kinds of shares for which
grants of Awards may be made (including the per-Grantee maximums set forth in Section 4), (B) the
number and kinds of shares for which outstanding Awards may be exercised or settled, and (C) the
performance goals relating to outstanding Awards, shall be equitably adjusted by the Company;
provided that any such adjustment shall comply with Section 409A. In addition, in the event of any suchincrease or decrease in the number of outstanding shares or other transaction described in clause (ii)above, the number and kind of shares for which Awards are outstanding and the Option Price per shareof outstanding Options and SAR Exercise Price per share of outstanding SARs shall be equitably
adjusted; provided that any such adjustment shall comply with Section 409A and no adjustments shallbe made is as a result, the Grantee receives a benefit that a shareholder of the Company does not receive.
15.2. Change in Control
Subject to the requirements and limitations of Section 409A, if applicable, the Board may
provide for any one or more of the following in connection with a Change in Control, which suchactions need not be the same for all Grantees:(i)

Accelerated Vesting. Unless otherwise provided in any Award Agreement, upon a
Change in Control, the exercisability, vesting and/or settlement of an Award shall not
accelerate.

(ii)

Assumption, Continuation or Substitution. In the event of a Change in Control, thesurviving, continuing, successor, or purchasing corporation or other business entity or
parent thereof, as the case may be (the “Acquiror”), may, without the consent of any
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APPENDIX H: RULES OF THE COMPANY ESOP
Grantee, either assume or continue the Company’s rights and obligations under each or
any Award or portion thereof outstanding immediately prior to the Change in Control orsubstitute for each or any such outstanding Award or portion thereof a substantiallyequivalent award with respect to the Acquiror’s stock, as applicable. For purposes of thisSection 15.2, if so determined by the Board, in its discretion, an Award denominated in
Shares shall be deemed assumed if, following the Change in Control, the Award confers
the right to receive, subject to the terms and conditions of the Plan and the applicableAward Agreement, for each Share subject to the Award immediately prior to the Change
in Control, the consideration (whether stock, cash, other securities or property or a
combination thereof) to which a holder of a Share on the effective date of the Change inControl was entitled; provided, however, that if such consideration is not solely common
stock of the Acquiror, the Board may, with the consent of the Acquiror, provide for theconsideration to be received upon the exercise or settlement of the Award, for each Sharesubject to the Award, to consist solely of common stock of the Acquiror equal in Fair
Market Value to the per share consideration received by holders of Shares pursuant to the
Change in Control. If any portion of such consideration may be received by holders of
Shares pursuant to the Change in Control on a contingent or delayed basis, the Board
may, in its sole discretion, determine such Fair Market Value per share as of the time of
the Change in Control on the basis of the Board’s good faith estimate of the present valueof the probable future payment of such consideration. Any Award or portion thereof
which is neither assumed or continued by the Acquiror in connection with the Change inControl nor exercised or settled as of the time of consummation of the Change in Control
shall terminate and cease to be outstanding effective as of the time of consummation of
the Change in Control.
(iii)

Cash-Out of Awards. The Board may, in its discretion and without the consent of any
Grantee, determine that, upon the occurrence of a Change in Control, each or any Awardor a portion thereof outstanding immediately prior to the Change in Control and notpreviously exercised or settled shall be canceled in exchange for a payment with respect
to each vested Share (and each unvested Share, if so determined by the Board) subject tosuch canceled Award in (i) cash, (ii) stock of the Company or of a corporation or otherbusiness entity a party to the Change in Control, or (iii) other property which, in any suchcase, shall be in an amount having a Fair Market Value equal to the Fair Market Value ofthe consideration to be paid per Share in the Change in Control, reduced by the exercise
or purchase price per share, if any, under such Award. If any portion of suchconsideration may be received by holders of Shares pursuant to the Change in Control ona contingent or delayed basis, the Board may, in its sole discretion, determine such Fair
Market Value per share as of the time of the Change in Control on the basis of theBoard’s good faith estimate of the present value of the probable future payment of suchconsideration. In the event such determination is made by the Board, the amount of suchpayment (reduced by applicable withholding taxes, if any) shall be paid to Grantees inrespect of the vested portions of their canceled Awards as soon as practicable following
the date of the Change in Control and in respect of the unvested portions of their canceledAwards in accordance with the vesting schedules applicable to such Awards. The Board
may, in its discretion, without payment of any consideration to the Grantee, cancel any
outstanding Award to the extent not vested or exercised immediately prior to the Change
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APPENDIX H: RULES OF THE COMPANY ESOPin Control and not otherwise assumed or continued by the Acquiror in accordance with
Section 15.2(ii) above.
15.3. Adjustments
Adjustments under this Section 15 related to Shares or other securities of the Company shall bemade by the Board, whose determination in that respect shall be final, binding and conclusive, andadjustments other than on a capitalisation issue must be confirmed in writing by the auditors of theCompany (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.
Unless the Board considers an adjustment to be appropriate, the issue of Shares or other securities as
consideration for an acquisition or a private placement of Shares or other securities shall not normally be
regarded as a circumstance requiring adjustment. No fractional Shares or other securities shall be issued
under any such adjustment, and any fractions resulting from any such adjustment shall be eliminated ineach case by rounding downward to the nearest whole Share.
16.

NO LIMITATIONS ON COMPANY

The grant of Awards shall not affect or limit in any way the right or power of the Company tomake adjustments, reclassifications, reorganizations, or changes of its capital or business structure or tomerge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets.
17.

TERMS APPLICABLE GENERALLY TO AWARDS
17.1. Disclaimer of Rights

No term or condition of the Plan or any Award Agreement shall be construed to confer upon any
individual the right to remain in the employ or service of the Company or any Affiliate, or to interfere in
any way with any contractual or other right or authority of the Company or any Affiliate either toincrease or decrease the compensation or other payments to any individual at any time, or to terminate
any employment or other relationship between any individual and the Company. In addition,
notwithstanding any other term or condition of the Plan, unless otherwise stated in the applicable Award
Agreement, no Award shall be affected by any change of duties or position of the Grantee, so long as
such Grantee continues to be a Service Provider. The obligation of the Company to pay any benefits
under the Plan shall be interpreted as a contractual obligation to pay only those amounts describedherein, in the manner and under the terms and conditions prescribed herein. The Plan shall in no way beinterpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any
amounts in trust or escrow for payment to any Grantee or beneficiary under the Plan.
17.2. Nonexclusivity of the Plan
The adoption of the Plan shall not be construed as creating any limitations upon the right andauthority of the Board to adopt such other incentive compensation arrangements (which arrangements
may be applicable either generally to a class or classes of individuals or specifically to a particular
individual or particular individuals), including, without limitation, the granting of Options as the Board
determines desirable.

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APPENDIX H: RULES OF THE COMPANY ESOP
17.3. Withholding Taxes
Whenever Shares are to be issued in satisfaction of Awards granted under the Plan, the Company
may require the Grantee to remit to the Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the issuance of such Shares. When, under applicable tax laws, a
Grantee incurs tax liability in connection with the exercise, vesting, purchase or settlement of any
Award that is subject to tax withholding and the Grantee is obligated to pay the Company the amountrequired to be withheld, the Board may in its sole discretion allow the Grantee to satisfy the minimum
withholding tax obligation by electing to have the Company withhold from the Shares to be issued thatminimum number of Shares having a Fair Market Value equal to the minimum amount required to be
withheld, determined on the date that the amount of tax to be withheld is to be determined, provided thatin no event will the Company withhold Shares if such withholding would result in adverse accounting
consequences to the Company. All elections by a Grantee to have Shares withheld for this purpose will
be made in accordance with the requirements established by the Board for such elections and be inwriting in a form acceptable to the Board.
17.4. Other Terms and Conditions; Employment Agreements
Each Award Agreement may contain such other terms and conditions not inconsistent with thePlan as may be determined by the Board, in its sole discretion. In the event of any conflict between theterms and conditions of an employment agreement and the Plan, the terms and conditions of theemployment agreement shall govern.
17.5. Severability
If any term or condition of the Plan or any Award Agreement is determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining terms and conditions hereof andthereof shall be severable and enforceable, and all terms and conditions shall remain enforceable in any
other jurisdiction.
17.6. Abstention from Voting
Shareholders who are eligible to participate in the Plan must abstain from voting on any
Shareholders' resolution relating to the Plan, including any Shareholders' resolution relating to theimplementation of the Plan, or the making of offers and grants of options under the Plan at a discountnot exceeding the maximum discount, or the participation by, and options granted to, Controlling
Shareholders and their Associates and should not accept nominations as proxy or otherwise for voting
unless specific instructions have been given in the proxy form on how the vote is to be cast.
17.7. Governing Law
The Plan and all Award Agreements will be construed in accordance with and governed by thelaws of the Cayman Islands without regard to the principles of conflicts of law that could cause theapplication of the laws of any jurisdiction other than the Cayman Islands. For purposes of resolving any
dispute that arises under the Plan, each Grantee will be subject to the dispute resolution provisions set
forth in the applicable Award Agreement.
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APPENDIX H: RULES OF THE COMPANY ESOP
17.8. Section 409A
The Plan and Awards (and payments and benefits thereunder) are intended to be exempt from, or
to comply with, Section 409A, and, accordingly, to the maximum extent permitted, the Plan, Award
Agreements and other agreements or arrangements relating to Awards shall be interpreted accordingly.
Notwithstanding anything to the contrary, to the extent required to avoid accelerated taxation and/or tax
penalties under Section 409A, (A) a Grantee shall not be considered to have had a Separation from
Service and no payment or benefit shall be due to the Grantee under the Plan or an Award until the
Grantee would be considered to have incurred a “separation from service” from the Company and its
Affiliates within the meaning of Section 409A and (B) if the Grantee is a “specified employee” (asdefined in Section 409A), amounts that would otherwise be payable and benefits that would otherwise
be provided under the Plan or an Award during the six-month period immediately following theGrantee’s separation from service shall instead be paid or provided on the first business day after thedate that is six months following the Grantee’s separation from service (or death, if earlier). Eachamount to be paid or benefit to be provided under the Plan or an Award shall be construed as a separate
identified payment for purposes of Section 409A. The Company makes no representation that any or allof the payments or benefits provided under the Plan or an Award will be exempt from or comply with
Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment
or benefit. The Grantee shall be solely responsible for the payment of any taxes and penalties incurredunder Section 409A, and the Company, its Affiliates and their respective employees, officers, directors,
agents and representatives (including legal counsel) will not have any liability to any Grantee withrespect to any taxes, penalties, interest or other costs or expenses the Grantee or any related party may
incur with respect to or as a result of Section 409A or for damages for failing to comply with
Section 409A.
17.9. Separation from Service
The Board shall determine the effect of a Separation from Service upon Awards, and such effectshall be set forth in the appropriate Award Agreement. Without limiting the foregoing, the Board may
provide in the Award Agreements at the time of grant, or any time thereafter with the consent of theGrantee, the actions that may be taken upon the occurrence of a Separation from Service, including
accelerated vesting or termination, depending upon the circumstances surrounding the Separation from
Service.
17.10. Transferability of Awards and Issued Shares
17.10.1.

Transfers in General

Except as provided in Section 17.9.2, no Award shall be assignable or transferable by the
Grantee to whom it is granted, other than by will or the laws of descent and distribution, and,during the lifetime of the Grantee, only the Grantee personally (or the Grantee’s personal
representative) may exercise rights under the Plan.
17.10.2.

Family Transfers

If authorized in the applicable Award Agreement, a Grantee may transfer, not for value,
all or part of an Award (other than Incentive Stock Options) to any Family Member. For the20802140214.11

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APPENDIX H: RULES OF THE COMPANY ESOP
purpose of this Section 17.9.2, a “not for value” transfer is a transfer that is (i) a gift, (ii) atransfer under a domestic relations order in settlement of marital property rights; or (iii) atransfer to an entity in which more than 50% of the voting interests are owned by Family
Members (or the Grantee) in exchange for an interest in that entity. After a transfer under thisSection 17.9.2, any such Award shall continue to be subject to the same terms and conditions as
were applicable immediately before transfer. Subsequent transfers of transferred Awards areprohibited except to Family Members of the original Grantee in accordance with thisSection 17.9.2 or by will or the laws of descent and distribution.
17.11. Dividend Equivalent Rights
If specified in the Award Agreement, the recipient of an Award may be entitled to receive
dividend equivalent rights with respect to the Shares or other securities covered by an Award. The terms
and conditions of a dividend equivalent right may be set forth in the Award Agreement. Dividend
equivalents credited to a Grantee may be paid in cash or deemed to be reinvested in additional Shares orother securities of the Company at a price per unit equal to the Fair Market Value of a Share on the datethat such dividend was paid to shareholders. Notwithstanding the foregoing, dividends or dividend
equivalents shall not be paid on any Award or portion thereof that is unvested or on any Award that is
subject to the achievement of performance criteria before the Award has become earned and payable.
17.12. Data Protection
A Grantee’s acceptance of an Award shall be deemed to constitute, as permitted under applicablelaw, the Grantee’s acknowledgement of and consent to the collection and processing of personal data
relating to the Grantee so that the Company can meet its obligations and exercise its rights under thePlan and generally administer and manage the Plan. This data shall include data about participation in
the Plan and Shares offered or received, purchased, or sold under the Plan and other appropriate
financial and other data (such as the date on which the Awards were granted) about the Grantee and theGrantee’s participation in the Plan.
17.13. Disqualifying Dispositions
Any Grantee who shall make a “disposition” (as defined in Section 424 of the Code) of all or any
portion of Shares acquired upon exercise of an Incentive Stock Option within two years from the Grant
Date of such Incentive Stock Option or within one year after the issuance of the Shares acquired upon
exercise of such Incentive Stock Option shall be required to immediately advise the Company in writing
as to the occurrence of the sale and the price realized upon the sale of such Shares.
17.14. Disclosures in Annual Reports
The following disclosures (as applicable) will be made by the Company in its annual report forso long as the Plan continues in operation:(i)the names of the members of the Committee administering the Plan;(ii)

the information required in the table below for the following participants of the Plan:(a)Participants who are directors of the Company;
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APPENDIX H: RULES OF THE COMPANY ESOP(b)

Participants who are Controlling Shareholders and their Associates; and(c)Participants (other than those in paragraphs (a) and (b) above) who have received
Shares issued pursuant to the Awards granted under the Plan and/or options orawards granted under any other share option scheme or share schemes of theCompany which, in aggregate, represent 5.0% or more of the aggregate of thetotal number of Shares available under the Plan and any other share option schemeor share schemes of the Company, collectively:

Name of
Participant

Aggregate
number of sharescomprised inAwards granted
during thefinancial year
under review(including
terms)

Aggregate
number of Sharescomprised inAwards grantedsincecommencementof the Plan to theend of thefinancial year
under review

Shares comprisedin Awards whichhave been issued
sincecommencementof the Plan to endof the financial
year under review

Aggregate
number of
Sharescomprised inAwards whichhave not been
vested or
exercised as at
the end of thefinancial year(iii)

the names of and number and terms of Shares comprised in the Awards granted to eachdirector and employee of the Company and its Affiliates who receive 5.0% or more of thetotal number of Awards available to all directors and employees of the Company and its
Affiliates under the Plan during the financial year under review;(iv)

the aggregate number of Shares comprised in Awards granted under the Plan to thedirectors and employees of the Company and its Affiliates for the financial year underreview, and since the commencement of the Plan to the end of the financial year ender
review;(v)

the number and proportion of Shares comprised in Awards granted at a discount during
the financial year under review in respect of every 10% discount rate, up to the maximum
quantum of discount granted; and(vi)

any other information required to be so disclosed pursuant to the Listing Manual and allother applicable laws and requirements,

provided that if any of the above requirements are not applicable, an appropriate negative
statement should be included therein.
17.15. Plan Construction
In the Plan, unless otherwise stated, the following uses apply:(i)references to a statute or law refer to the statute or law and any amendments and any
successor statutes or laws, and to all valid and binding governmental regulations, court
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APPENDIX H: RULES OF THE COMPANY ESOP
decisions, and other regulatory and judicial authority issued or rendered thereunder, as
amended, or their successors, as in effect at the relevant time;(ii)

in computing periods from a specified date to a later specified date, the words “from” and“commencing on” (and the like) mean “from and including,” and the words “to,” “until”
and “ending on” (and the like) mean “to and including”;(iii)

indications of time of day shall be based upon the time applicable to the location of theprincipal headquarters of the Company;(iv)

the words “include,” “includes” and “including” (and the like) mean “include, without
limitation,” “includes, without limitation” and “including, without limitation” (and thelike), respectively;(v)

all references to articles and sections are to articles and sections in the Plan;(vi)

all words used shall be construed to be of such gender or number as the circumstancesand context require;(vii)

the captions and headings of articles and sections have been inserted solely forconvenience of reference and shall not be considered a part of the Plan, nor shall any ofthem affect the meaning or interpretation of the Plan; and(viii) any reference to an agreement, plan, policy, form, document or set of documents, and therights and obligations of the parties under any such agreement, plan, policy, form,
document or set of documents, shall mean such agreement, plan, policy, form, document
or set of documents as amended from time to time, and any and all modifications,extensions, renewals, substitutions or replacements thereof.

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APPENDIX I: RULES OF THE EIS
17LIVE GROUP LIMITEDEXECUTIVE INCENTIVE SCHEME
17LIVE Group Limited, a Cayman Islands exempted company (the “Company”), sets forth
herein the terms and conditions of its Executive Incentive Scheme (the “Scheme”), as follows:
1.

PURPOSEThe Scheme is intended to enhance the ability of the Company and its Affiliates (as defined
herein) to attract and retain Key Executives, and to motivate such Key Executives to serve the Company
and its Affiliates and to expend maximum effort to improve the business results and earnings of theCompany, by providing to such persons an opportunity to acquire or increase a direct proprietary interestin the operations and future success of the Company through awards of RSUs.
2.

DEFINITIONS

For purposes of interpreting the Scheme and related documents (including Award Agreements),
the following definitions shall apply:“Acquiror” shall have the meaning set forth in Section 11.2(ii).
“Affiliate” means an entity in which the Company has a controlling interest, directly or
indirectly through one or more intermediaries.
“Associate” shall have the meaning ascribed to it in the Listing Manual, and “Associates” shallbe construed accordingly.
“Award” means a grant, under the Scheme, of an RSU.
“Award Agreement” means a written agreement (including an agreement transmitted
electronically) between the Company and a Grantee, or notice from the Company or an Affiliate to a
Grantee that evidences and sets out the terms and conditions of an Award.
“Board” means the Board of Directors of the Company.
“Cause” shall be defined as that term is defined in the Grantee’s offer letter or other applicable
employment agreement; or, if there is no such definition, “Cause” means, as determined by theCompany and unless otherwise provided in an applicable Award Agreement: (i) the Grantee’s willful
failure to perform his or her duties and responsibilities; (ii) the Grantee’s illegal conduct or grossmisconduct, in either case that is willful and results in material and demonstrable damage to the businessor reputation of the Company; (iii) the Grantee’s commission of any act of fraud, embezzlement,
dishonesty or willful misconduct; (iv) unauthorized use or disclosure by the Grantee of any proprietary
information of the Company or any Affiliate; or (v) Grantee’s willful breach of any of his or her
obligations under any agreement with the Company or any Affiliate. The Committee, in its absolute
discretion, shall determine the effect of all matters and questions relating to the existence of Cause.
“Change in Control” shall mean, in the case of a particular Award, unless the applicable Award
Agreement states otherwise or contains a different definition of “Change in Control,” (i) any sale, lease,1

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APPENDIX I: RULES OF THE EIS
exchange or other transfer (in one transaction or a series of related transactions) of all or substantially allof the assets of the Company and its subsidiaries to an independent third party, (ii) the sale to or
acquisition by an independent third party of more than 50% of the outstanding shares of the Company,(iii) the approval by the holders of the outstanding voting power of the Company of a reorganization,
merger or consolidation of the Company, as a result of which an independent third party will own morethan 50% of the then outstanding combined voting power of the Company or (iv) the approval by theCompany’s shareholders of a complete liquidation or dissolution of the Company.
Solely to the extent required by Section 409A, an event described above shall not constitute a
Change in Control for purposes of the payment (but not vesting) terms and conditions of any Award thatis determined to be subject to Section 409A unless such event also constitutes a change in ownership or
effective control of the Company or a change in the ownership of a substantial portion of the Company’s
assets within the meaning of Section 409A (a “409A Change in Control Event”).
“Code” means the US Internal Revenue Code of 1986, as it may be amended from time to time.
Any reference to a section of the Code shall be deemed to include a reference to any valid and binding
governmental regulations, court decisions and other regulatory and judicial authority issued or
promulgated thereunder.
“Committee” means the remuneration committee of the Board. The Board shall cause theCommittee to satisfy the applicable requirements of any stock exchange on which the Common Stock
may then be listed.
“Company” shall have the meaning set forth in the preamble.
“Controlling Shareholder” shall have the meaning assigned to it in the Listing Manual, and“Controlling Shareholders” shall be construed accordingly.
“Disability” means “permanent and total disability” as set forth in Code Section 22(e)(3).
“Effective Date” means the date falling on or around 8 December 2023, or such other date as theBoard may determine.
“Fair Market Value” means, as of any date, the value of Shares determined as follows: (a) If
the Shares are listed on one or more established and regulated securities exchanges, national market
systems or automated quotation system on which Shares are listed, quoted or traded, Fair Market Value
shall be the closing sales price for such Shares (or the closing bid, if no sales were reported) as quoted
on the principal exchange or system on which the Shares are listed (as determined by the Committee) on
the date of determination (or, if no closing sales price or closing bid was reported on that date, asapplicable, on the last trading date such closing sales price or closing bid was reported), as reported in
The Wall Street Journal or such other source as the Committee deems reliable; (b) If the Shares are notlisted on an established securities exchange, national market system or automated quotation system, but
are regularly quoted by a recognized securities dealer, Fair Market Value shall be the closing sales pricefor such shares as quoted by such securities dealer on the date of determination, but if selling prices are
not reported, the Fair Market Value of a Share shall be the mean between the high bid and low asked
prices for the Shares on the date of determination (or, if no such prices were reported on that date, on thelast date such prices were reported), as reported in The Wall Street Journal or such other source as the2

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APPENDIX I: RULES OF THE EIS
Committee deems reliable; or (c) In the absence of an established market for the Shares of the typedescribed in (a) and (b), above, the Fair Market Value shall be determined by the Committee in goodfaith and in its discretion by reference to (i) the placing price of the latest private placement of the
Shares and the development of the Company’s business operations and the general economic and market
conditions since such latest private placement, (ii) other third party transactions involving the Shares andthe development of the Company’s business operation and the general economic and market conditions
since such sale, (iii) an independent valuation of the Shares, or (iv) such other methodologies orinformation as the Committee determines to be indicative of Fair Market Value.
“Family Member” means a person who is a spouse, former spouse, child, stepchild, grandchild,parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-inlaw, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the applicable
individual, any person sharing the applicable individual’s household (other than a tenant or employee), a
trust in which any one or more of these persons have more than 50% of the beneficial interest, afoundation in which any one or more of these persons (or the applicable individual) control the
management of assets, and any other entity in which one or more of these persons (or the applicable
individual) own more than 50% of the voting interests.
“Grantee” means a person who receives or holds an Award under the Scheme.
“Issued Share” means, collectively, all outstanding Shares issued pursuant to Awards.
“Key Executives” means the members of the management team of the Company as confirmedby the Committee.
“Listing Manual” means the Listing Manual of the SGX-ST.
“Restricted Period” shall have the meaning set forth in Section 8.1.
“Restricted Stock Unit” or “RSU” means a bookkeeping entry representing the equivalent of
Shares, awarded to a Grantee under Section 8.
“Scheme” shall have the meaning set forth in the preamble.
“Section 409A” means Code Section 409A.
“Separation from Service” means the termination of the applicable Grantee’s employment with,and performance of services for, the Company and each Affiliate. Unless otherwise determined by theCompany, if a Grantee’s employment or service with the Company or an Affiliate terminates but the
Grantee continues to provide services to the Company or an Affiliate in a non-employee director
capacity or as an employee or officer, as applicable, such change in status shall not be deemed a
Separation from Service. Approved temporary absences from employment because of illness, vacation,or leave of absence and transfers among the Company and its Affiliates shall not be considered
Separations from Service. Notwithstanding the foregoing, with respect to any Award that constitutes
nonqualified deferred compensation under Section 409A, “Separation from Service” shall mean a“separation from service” as defined under Section 409A.
“Service Provider” means an employee of the Company or an Affiliate.
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APPENDIX I: RULES OF THE EIS“Share” means an ordinary share of the Company.
“SGX-ST” means the Singapore Exchange Securities Trading Limited.
“Substitute Award” means any Award granted in assumption of or in substitution for an award
of a company or business acquired by the Company or an Affiliate or with which the Company or an
Affiliate combines.
“Termination Date” means the date that is three (3) years after the Effective Date.
3.

ADMINISTRATION OF THE PLAN
3.1.

GeneralThe Scheme will be administered by the Committee, as delegate of the Board. All determinations
and decisions made by the Committee pursuant to the Scheme will be final, conclusive and binding on
all persons and will be given the maximum deference permitted by law. To the extent permitted byapplicable law, the Board shall have the power and authority to delegate its powers and responsibilities
hereunder to the Committee, which shall have full authority to act in accordance with its charter (as ineffect from time to time), and with respect to the authority of the Board to act hereunder. All references
to the Board shall be deemed to include a reference to the Committee to the extent such power or
responsibilities of the Board have been delegated, including:(i)approving the list of Grantees and the number of Awards to be granted to each Grantee;(ii)

approving the vesting schedule and vesting conditions of the Awards to be set out in theAward Agreement with each Grantee, provided that, such Award Agreement shallprovide that (A) vesting of the Awards shall take place during the three-year period after
the Grant Date, in such number of tranches and in such portion to be set out in the Award
Agreement; and (B) vesting of each tranche of the Awards shall be conditional upon (y)continued employment of the Grantee by the Company as at the applicable vesting date;and (z) the satisfaction of certain financial targets and key performance indicators, detailsof which shall be set out in the Award Agreement (the “Financial Targets”);(iii)

determining whether the vesting conditions with respect to each tranche of the Awards
have been satisfied, including the Financial Targets (determined by reference to therelevant audited consolidated financial statements of the Company); and(iv)(A) if the Financial Targets with respect to a tranche are satisfied, submitting its approval
and recommendation to the Board for allotment and issuance of Shares pursuant to such
vested tranche; or (B) if the Financial Targets with respect to a tranche are not satisfied,
but the financial figure(s) achieved is 5% (or less) below the relevant Financial Target,
determining, in its sole discretion, whether to approve the allotment and issuance ofShares pursuant to such tranche in any event; for the avoidance of doubt, if the financial
figure(s) achieved is more than 5% below the relevant Financial Target, the rights of theGrantee to the Shares in relation to such vesting condition shall lapse and be
extinguished;

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APPENDIX I: RULES OF THE EIS
provided that the Board shall retain the right to exercise the authority of the Committee to theextent consistent with applicable law and the applicable requirements of any securities exchange on
which the Shares may then be listed.
3.2.

Committee Composition

The Board may elect one or more officers or directors to sit on the Committee in its sole
discretion. Each such officer or director will not be excluded from participating in the Scheme ifotherwise eligible, but he or she may not act on or pass any matters pertaining specifically to his or her
own benefit or eligibility under the Scheme. The Board or a committee of the Board will act on any
matters pertaining specifically to the benefit or eligibility of such officer under the Scheme.
3.3.

Authority of Board

Except as specifically provided in Section 10 or as otherwise may be required by applicable law,regulatory requirement, or the articles of incorporation or the bylaws of the Company, the Board shallhave full power and authority to take all actions and to make all determinations required or provided forunder the Scheme, any Award or any Award Agreement, and shall have full power and authority to takeall such other actions and make all such other determinations, including determinations of fact, notinconsistent with the specific terms and conditions of the Scheme that the Board deems to be necessary
or appropriate to the administration of the Scheme. The interpretation and construction by the Board of
the Scheme, any Award, or any Award Agreement shall be final, binding, and conclusive. Without
limitation, the Board shall have full and final authority, subject to the other terms and conditions of the
Scheme, to:(i)construe and interpret the Scheme and apply its provisions;(ii)

designate Grantees;(iii)

determine the number of Shares to be subject to an Award;(iv)

establish the terms and conditions of each Award (including, but not limited to, the natureand duration of any restriction or condition (or provision for lapse thereof) relating to thevesting, exercise, transfer, or forfeiture of an Award or the Shares subject thereto);(v)

prescribe the form of each Award Agreement;(vi)amend, modify, or supplement the terms and conditions of any outstanding Award,
including the authority, in order to effectuate the purposes of the Scheme, to modify
Awards to foreign nationals or individuals who are employed outside the United States torecognize differences in local law, tax policy, or custom;(vii)

promulgate, amend and rescind rules and regulations relating to the administration of the
Scheme; and(viii) to authorize any person to execute, on behalf of the Company, any instrument required tocarry out the purposes of the Scheme.

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APPENDIX I: RULES OF THE EIS
Any or all of the provisions of the Scheme may be modified from time to time and at any
time, by a resolution of the Board, except that any modification which would be to the advantage
of Grantees under the Scheme, shall be subject to the prior approval of shareholders of theCompany in a general meeting.
3.4.

Separation from Service; Clawbacks
3.4.1. Separation from Service other than for CauseAny unvested portion of an Award shall lapse if the Grantee incurs a Separation from
Service during the vesting period.
3.4.2. Separation from Service for Cause
The Company may annul an Award (whether vested or unvested) if the Grantee incurs a
Separation from Service for Cause.
3.4.3. Clawbacks
All awards, amounts, or benefits received or outstanding under the Scheme shall be
subject to clawback, cancellation, recoupment, rescission, payback, reduction, or other similaraction in accordance with any Company clawback or similar policy (“Clawback Policy”) or any
applicable law related to such actions. In addition, a Grantee may be required to repay to theCompany previously paid compensation, whether provided pursuant to the Scheme or an Award
Agreement in accordance with the Clawback Policy. A Grantee’s acceptance of an Award shallbe deemed to constitute the Grantee’s acknowledgement of and consent to the Company’s
application, implementation, and enforcement of any applicable Company clawback or similar
policy that may apply to the Grantee, whether adopted before or after the Effective Date andwhether before or after the Grant Date of an Award, and any applicable law relating to clawback,cancellation, recoupment, rescission, payback, or reduction of compensation, and the Grantee’s
agreement that the Company may take any actions that may be necessary to effectuate any suchpolicy or applicable law, without further consideration or action.
3.5.

Deferral Arrangement

The Board may permit or require the deferral of any Award payment into a deferredcompensation arrangement, subject to such rules and procedures as it may establish and in accordancewith Section 409A, which may include terms and conditions for the payment or crediting of interest or
dividend equivalents, including converting such credits into deferred units.
3.6.

No Liability

No member of the Board or the Committee shall be liable for any action or determination madein good faith with respect to the Scheme, any Award, or Award Agreement.

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APPENDIX I: RULES OF THE EIS
3.7.

Book Entry

Notwithstanding any other term or condition of the Scheme to the contrary, the Company may
elect to satisfy any requirement under the Scheme for the delivery of stock certificates through the use ofbook-entry.
3.8.

Eligibility of Grantees

At the absolute discretion of the Committee, Key Executives are eligible to participate in the
Scheme.
4.

SHARES SUBJECT TO THE PLAN
4.1.

Authorized Number of Shares

Subject to adjustment under Section 11, the total number of Shares authorized to be issued
pursuant to Awards awarded under the Scheme shall not exceed 2,550,000 Shares, which shall not, inany event, exceed 15.0% of the total number of issued Shares (excluding Shares held by the Company astreasury shares, if any) when aggregated with (a) the total number of Shares issued and/or to be issued
pursuant to Awards already awarded under the Scheme; and (b) the aggregate number of Shares overwhich RSUs are granted under any other share option scheme or share schemes of the Company. Sharesissued under the Scheme shall consist in whole or in part of authorized but unissued Shares, treasury
Shares, or Shares purchased on the open market or otherwise, all as determined by the Company fromtime to time.
4.2.

Share Counting
4.2.1. General

Each Share granted in connection with an Award shall be counted as one Share against
the limit in Section 4.1, subject to this Section 4.2.
4.2.2. Expired or Terminated Awards
If any Award under the Scheme expires, or is terminated, surrendered, or forfeited, inwhole or in part, the unissued Shares covered by such Award shall again be available for the
grant of Awards.
4.2.3. Repurchased, Surrendered, or Forfeited Awards
If Issued Shares are repurchased by, or are surrendered or forfeited to the Company at no
more than cost, such Shares shall again be available for the grant of Awards.
4.2.4. Tax Withholding in Shares
Notwithstanding anything to the contrary contained herein: Shares subject to an Award
under the Scheme shall not again be made available for issuance or delivery under the Scheme if

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APPENDIX I: RULES OF THE EIS
such Shares are Shares delivered or withheld by the Company to satisfy any tax withholding
obligation.
4.2.5. Substitute Awards
In the case of any Substitute Award, such Substitute Award shall not be counted against
the number of Shares reserved under the Scheme.
5.

EFFECTIVE DATE, DURATION, AND AMENDMENTS
5.1.

Term

The Scheme shall be effective as of the Effective Date. The Scheme shall terminate
automatically on the three-year anniversary of the Effective Date.
5.2.

Amendment and Termination of the Scheme

The Board may, at any time and from time to time, amend or suspend the Scheme as to any
Awards which have not been made. No Awards may be granted after the Termination Date. The
applicable terms and conditions of the Scheme, and any terms and conditions applicable to Awards
granted before the Termination Date shall survive the termination of the Scheme and continue to apply
to such Awards. No amendment, suspension, or termination of the Scheme shall, without the consent of
the Grantee, materially impair rights or obligations under any Award theretofore awarded.
6.

AWARD ELIGIBILITY AND LIMITATIONS
6.1.

Service Providers

Awards may be made to any Service Provider, as the Board may determine and designate fromtime to time, in its discretion, subject to Section 3.8. The Board may grant an Award to a person who isreasonably expected to become a Service Provider provided that such grant is contingent upon such
person becoming a Service Provider.
6.2.

Successive Awards

Service Providers may receive more than one Award, subject to such restrictions as are provided
herein.
6.3.

Stand-Alone, Additional, Tandem, and Substitute Awards

The Board may grant Awards either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of the Company, any Affiliate,
or any business entity to be acquired by the Company or an Affiliate, or any other right of a Grantee toreceive payment from the Company or any Affiliate. Such additional, tandem, substitute or exchangeAwards may be granted at any time. If an Award is granted in substitution or exchange for anotherAward, the Board shall have the right to require the surrender of such other Award in consideration for
the grant of the new Award. Subject to Section 3.3(viii), and the requirements of applicable law, theBoard shall have the right, in its discretion, to make Awards in substitution or exchange for any other
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APPENDIX I: RULES OF THE EIS
award under another plan of the Company, any Affiliate, or any business entity to be acquired by theCompany or an Affiliate. In addition, Awards may be granted in lieu of cash compensation, including inlieu of cash amounts payable under other plans of the Company or any Affiliate, in which the value of
Shares subject to the Award is equivalent in value to the cash compensation.
7.

AWARD AGREEMENT

Each Award shall be evidenced by an Award Agreement, in such form or forms as the Board
shall from time to time determine. Without limiting the foregoing, an Award Agreement may beprovided in the form of a notice that provides that acceptance of the Award constitutes acceptance of allterms and conditions of the Scheme and the notice. Award Agreements granted from time to time or at
the same time need not contain similar terms and conditions but shall be consistent with the terms andconditions of the Scheme.
8.

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS (RSUs)
8.1.

Restrictions

At the time of grant, the Board may, in its sole discretion, establish a period of time (a“Restricted Period”) and any additional restrictions including the satisfaction of corporate or individual
performance objectives applicable to an Award of Restricted Stock Units. Each Award of RSUs may besubject to a different Restricted Period and additional restrictions. The RSUs may not be sold,transferred, assigned, pledged, or otherwise encumbered or disposed of during the Restricted Period or
prior to the satisfaction of any other applicable restrictions.
8.2.

Rights of Holders of RSUs
8.2.1. Settlement of RSUs

RSUs shall be settled in Shares, and the allotment and issuance of Shares shall becompleted within fourteen (14) trading days after the applicable vesting date. The Award
Agreement shall also set forth whether the RSUs shall be settled (i) within the time period
specified for “short term deferrals” under Section 409A or (ii) otherwise within the requirementsof Section 409A, in which case the Award Agreement shall specify upon which events such
RSUs shall be settled.
8.2.2. Voting and Dividend Rights
Unless otherwise stated in the applicable Award Agreement, holders of RSUs shall nothave rights as shareholders, including no voting or dividend or dividend equivalents rights.
8.2.3. Creditor’s Rights
A holder of RSUs shall have no rights other than those of a general creditor of theCompany. RSUs represent an unfunded and unsecured obligation of the Company, subject to theapplicable Award Agreement.

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APPENDIX I: RULES OF THE EIS
8.3.

Delivery of Stock

Upon the expiration or termination of any Restricted Period and the satisfaction of any otherterms and conditions prescribed by the Board, the restrictions applicable to RSUs settled in Shares shalllapse, and, unless otherwise provided in the Award Agreement, a stock certificate for such Shares shallbe delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as thecase may be.
9.

TERMS AND CONDITIONS OF PERFORMANCE AWARDS

The right of a Grantee to exercise or receive a grant or settlement of any Award, and the timing
thereof, may be subject to such performance conditions as may be specified by the Board which shall
include, but is not limited to, his rank, job performance, years of service, potential for future
development, future contribution to the success and development of the Company and the extent ofeffort and difficulty with which the performance conditions may be achieved. The Board may use suchbusiness criteria and other measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce the amounts payable under any Award
subject to performance conditions.
10.

REQUIREMENTS OF LAW

The Company shall not be required to sell or issue any Shares under any Award if the sale orissuance of such Shares would constitute a violation by the Grantee, any other individual, or theCompany of any law or regulation of any governmental authority, including any applicable securities
laws or regulations. If at any time the Company determines that the listing, registration, or qualificationof any Shares subject to an Award upon any securities exchange or under any governmental regulatory
body is necessary or desirable as a term or condition of, or in connection with, the issuance or purchaseof Shares hereunder, no Shares may be issued or sold to the Grantee or any other individual exercising
an Option unless such listing, registration, qualification, consent or approval shall have been effected or
obtained free of any terms and conditions not acceptable to the Company, and any delay caused thereby
shall in no way affect the date of termination of the Award. The Board may require the Grantee to sign
such additional documentation, make such representations, and furnish such information as the Board
may consider appropriate in connection with the grant of Awards or issuance or delivery of Shares incompliance with applicable laws.
11.

EFFECT OF CHANGES IN CAPITALIZATION
11.1. Changes in Equity

If the number of outstanding Shares is increased or decreased or the Shares are changed into or
exchanged for a different number or kind of shares or other securities of the Company on account of any
rights issue, capital reduction, recapitalization, reclassification, stock split or sub-division, reverse split,
consolidation of shares, exchange of shares, stock dividend or other distribution payable in capital stock,or other increase or decrease in such Shares effected without receipt of consideration by the Company
occurring after the Effective Date, (A) the number and kinds of shares for which grants of Awards may
be made, (B) the number and kinds of shares for which outstanding Awards may be settled, and (C) the
performance goals relating to outstanding Awards, shall be equitably adjusted by the Company;
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APPENDIX I: RULES OF THE EIS
provided that any such adjustment shall comply with Section 409A and no adjustments shall be made is
as a result, the Grantee receives a benefit that a shareholder of the Company does not receive.
11.2. Change in Control
Subject to the requirements and limitations of Section 409A, if applicable, the Board may
provide for any one or more of the following in connection with a Change in Control, which suchactions need not be the same for all Grantees:(i)

Accelerated Vesting. Unless otherwise provided in any Award Agreement, upon a
Change in Control, the vesting and/or settlement of an Award shall not accelerate.

(ii)

Assumption, Continuation or Substitution. In the event of a Change in Control, thesurviving, continuing, successor, or purchasing corporation or other business entity or
parent thereof, as the case may be (the “Acquiror”), may, without the consent of any
Grantee, either assume or continue the Company’s rights and obligations under each or
any Award or portion thereof outstanding immediately prior to the Change in Control orsubstitute for each or any such outstanding Award or portion thereof a substantiallyequivalent award with respect to the Acquiror’s stock, as applicable. For purposes of thisSection 11.2, if so determined by the Board, in its discretion, an Award denominated in
Shares shall be deemed assumed if, following the Change in Control, the Award confers
the right to receive, subject to the terms and conditions of the Scheme and the applicableAward Agreement, for each Share subject to the Award immediately prior to the Change
in Control, the consideration (whether stock, cash, other securities or property or a
combination thereof) to which a holder of a Share on the effective date of the Change inControl was entitled; provided, however, that if such consideration is not solely common
stock of the Acquiror, the Board may, with the consent of the Acquiror, provide for theconsideration to be received upon the exercise or settlement of the Award, for each Sharesubject to the Award, to consist solely of common stock of the Acquiror equal in Fair
Market Value to the per share consideration received by holders of Shares pursuant to the
Change in Control. If any portion of such consideration may be received by holders of
Shares pursuant to the Change in Control on a contingent or delayed basis, the Board
may, in its sole discretion, determine such Fair Market Value per share as of the time of
the Change in Control on the basis of the Board’s good faith estimate of the present valueof the probable future payment of such consideration. Any Award or portion thereof
which is neither assumed or continued by the Acquiror in connection with the Change inControl nor exercised or settled as of the time of consummation of the Change in Control
shall terminate and cease to be outstanding effective as of the time of consummation of
the Change in Control.

(iii)

Cash-Out of Awards. The Board may, in its discretion and without the consent of any
Grantee, determine that, upon the occurrence of a Change in Control, each or any Awardor a portion thereof outstanding immediately prior to the Change in Control and notpreviously settled shall be canceled in exchange for a payment with respect to each
vested Share (and each unvested Share, if so determined by the Board) subject to suchcanceled Award in (i) cash, (ii) stock of the Company or of a corporation or otherbusiness entity a party to the Change in Control, or (iii) other property which, in any such
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APPENDIX I: RULES OF THE EIS
case, shall be in an amount having a Fair Market Value equal to the Fair Market Value ofthe consideration to be paid per Share in the Change in Control. If any portion of suchconsideration may be received by holders of Shares pursuant to the Change in Control ona contingent or delayed basis, the Board may, in its sole discretion, determine such Fair
Market Value per share as of the time of the Change in Control on the basis of theBoard’s good faith estimate of the present value of the probable future payment of suchconsideration. In the event such determination is made by the Board, the amount of suchpayment (reduced by applicable withholding taxes, if any) shall be paid to Grantees inrespect of the vested portions of their canceled Awards as soon as practicable following
the date of the Change in Control and in respect of the unvested portions of their canceledAwards in accordance with the vesting schedules applicable to such Awards. The Board
may, in its discretion, without payment of any consideration to the Grantee, cancel any
outstanding Award to the extent not vested immediately prior to the Change in Control
and not otherwise assumed or continued by the Acquiror in accordance with Section
11.2(ii) above.
11.3. Adjustments
Adjustments under this Section 11 related to Shares or other securities of the Company shall bemade by the Board, whose determination in that respect shall be final, binding and conclusive, andadjustments other than on a capitalization issue must be confirmed in writing by the auditors of theCompany (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.
Unless the Board considers an adjustment to be appropriate, the issue of Shares or other securities as
consideration for an acquisition or a private placement of Shares or other securities shall not normally be
regarded as a circumstance requiring adjustment. No fractional Shares or other securities shall be issued
under any such adjustment, and any fractions resulting from any such adjustment shall be eliminated ineach case by rounding downward to the nearest whole Share.
12.

NO LIMITATIONS ON COMPANY

The grant of Awards shall not affect or limit in any way the right or power of the Company tomake adjustments, reclassifications, reorganizations, or changes of its capital or business structure or tomerge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets.
13.

TERMS APPLICABLE GENERALLY TO AWARDS
13.1. Disclaimer of Rights

No term or condition of the Scheme or any Award Agreement shall be construed to confer upon
any individual the right to remain in the employ or service of the Company or any Affiliate, or tointerfere in any way with any contractual or other right or authority of the Company or any Affiliate
either to increase or decrease the compensation or other payments to any individual at any time, or toterminate any employment or other relationship between any individual and the Company. In addition,
notwithstanding any other term or condition of the Scheme, unless otherwise stated in the applicableAward Agreement, no Award shall be affected by any change of duties or position of the Grantee, solong as such Grantee continues to be a Service Provider. The obligation of the Company to pay any
benefits under the Scheme shall be interpreted as a contractual obligation to pay only those amounts
12

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APPENDIX I: RULES OF THE EIS
described herein, in the manner and under the terms and conditions prescribed herein. The Scheme shallin no way be interpreted to require the Company to transfer any amounts to a third party trustee orotherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the
Scheme.
13.2. Nonexclusivity of the Scheme
The adoption of the Scheme shall not be construed as creating any limitations upon the right andauthority of the Board to adopt such other incentive compensation arrangements (which arrangements
may be applicable either generally to a class or classes of individuals or specifically to a particular
individual or particular individuals).
13.3. Withholding Taxes
Whenever Shares are to be issued in satisfaction of Awards granted under the Scheme, theCompany may require the Grantee to remit to the Company an amount sufficient to satisfy federal, stateand local withholding tax requirements prior to the issuance of such Shares. When, under applicable tax
laws, a Grantee incurs tax liability in connection with the exercise, vesting, purchase or settlement of
any Award that is subject to tax withholding and the Grantee is obligated to pay the Company theamount required to be withheld, the Board may in its sole discretion allow the Grantee to satisfy theminimum withholding tax obligation by electing to have the Company withhold from the Shares to beissued that minimum number of Shares having a Fair Market Value equal to the minimum amountrequired to be withheld, determined on the date that the amount of tax to be withheld is to be
determined, provided that in no event will the Company withhold Shares if such withholding would
result in adverse accounting consequences to the Company. All elections by a Grantee to have Shares
withheld for this purpose will be made in accordance with the requirements established by the Board forsuch elections and be in writing in a form acceptable to the Board.
13.4. Other Terms and Conditions; Employment Agreements
Each Award Agreement may contain such other terms and conditions not inconsistent with the
Scheme as may be determined by the Board, in its sole discretion. To the maximum extent permitted byapplicable law, in the event of any conflict between the terms and conditions of an employment
agreement and the Scheme, the terms and conditions of the Scheme shall govern.
13.5. Abstention from Voting
Shareholders who are eligible to participate in the Scheme must abstain from voting on any
Shareholders' resolution relating to the Scheme, including any Shareholders' resolution relating to theimplementation of the Scheme, and should not accept nominations as proxy or otherwise for voting
unless specific instructions have been given in the proxy form on how the vote is to be cast.
13.6. Severability
If any term or condition of the Scheme or any Award Agreement is determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining terms and conditions hereof andthereof shall be severable and enforceable, and all terms and conditions shall remain enforceable in any
other jurisdiction.
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APPENDIX I: RULES OF THE EIS
13.7. Governing Law
The Scheme and all Award Agreements will be construed in accordance with and governed by
the laws of the Cayman Islands without regard to the principles of conflicts of law that could cause theapplication of the laws of any jurisdiction other than the Cayman Islands. For purposes of resolving any
dispute that arises under the Scheme, each Grantee will be subject to the dispute resolution provisions
set forth in the applicable Award Agreement.
13.8. Section 409A
The Scheme and Awards (and payments and benefits thereunder) are intended to be exempt
from, or to comply with, Section 409A, and, accordingly, to the maximum extent permitted, the Scheme,Award Agreements and other agreements or arrangements relating to Awards shall be interpreted
accordingly. Notwithstanding anything to the contrary, to the extent required to avoid accelerated
taxation and/or tax penalties under Section 409A, (A) a Grantee shall not be considered to have had a
Separation from Service and no payment or benefit shall be due to the Grantee under the Scheme or an
Award until the Grantee would be considered to have incurred a “separation from service” from theCompany and its Affiliates within the meaning of Section 409A and (B) if the Grantee is a “specified
employee” (as defined in Section 409A), amounts that would otherwise be payable and benefits thatwould otherwise be provided under the Scheme or an Award during the six-month period immediately
following the Grantee’s separation from service shall instead be paid or provided on the first business
day after the date that is six months following the Grantee’s separation from service (or death, if earlier).
Each amount to be paid or benefit to be provided under the Scheme or an Award shall be construed as aseparate identified payment for purposes of Section 409A. The Company makes no representation thatany or all of the payments or benefits provided under the Scheme or an Award will be exempt from orcomply with Section 409A and makes no undertaking to preclude Section 409A from applying to any
such payment or benefit. The Grantee shall be solely responsible for the payment of any taxes andpenalties incurred under Section 409A, and the Company, its Affiliates and their respective employees,
officers, directors, agents and representatives (including legal counsel) will not have any liability to any
Grantee with respect to any taxes, penalties, interest or other costs or expenses the Grantee or any
related party may incur with respect to or as a result of Section 409A or for damages for failing tocomply with Section 409A.
13.9.

Separation from Service

The Board shall determine the effect of a Separation from Service upon Awards, and such effectshall be set forth in the appropriate Award Agreement. Without limiting the foregoing, the Board may
provide in the Award Agreements at the time of grant, or any time thereafter with the consent of theGrantee, the actions that may be taken upon the occurrence of a Separation from Service, including
accelerated vesting or termination, depending upon the circumstances surrounding the Separation from
Service.
13.10. Transferability of Awards and Issued Shares
13.10.1.

Transfers in General

Except as provided in Section 13.9.2, no Award shall be assignable or transferable by the
Grantee to whom it is granted, other than by will or the laws of descent and distribution, and,
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APPENDIX I: RULES OF THE EIS
during the lifetime of the Grantee, only the Grantee personally (or the Grantee’s personal
representative) may exercise rights under the Scheme.
13.10.2.

Family Transfers

If authorized in the applicable Award Agreement, a Grantee may transfer, not for value,
all or part of an Award to any Family Member. For the purpose of this Section 13.9.2, a “not forvalue” transfer is a transfer that is (i) a gift, (ii) a transfer under a domestic relations order insettlement of marital property rights; or (iii) a transfer to an entity in which more than 50% of thevoting interests are owned by Family Members (or the Grantee) in exchange for an interest inthat entity. After a transfer under this Section 13.9.2, any such Award shall continue to be
subject to the same terms and conditions as were applicable immediately before transfer.
Subsequent transfers of transferred Awards are prohibited except to Family Members of theoriginal Grantee in accordance with this Section 13.9.2 or by will or the laws of descent anddistribution.
13.11. Data Protection
A Grantee’s acceptance of an Award shall be deemed to constitute, as permitted under applicablelaw, the Grantee’s acknowledgement of and consent to the collection and processing of personal data
relating to the Grantee so that the Company can meet its obligations and exercise its rights under the
Scheme and generally administer and manage the Scheme. This data shall include data about
participation in the Scheme and Shares offered or received, purchased, or sold under the Scheme andother appropriate financial and other data (such as the date on which the Awards were granted) about the
Grantee and the Grantee’s participation in the Scheme.
13.12. Disclosures in Annual Reports
The following disclosures (as applicable) will be made by the Company in its annual report forso long as the Scheme continues in operation:(i)the names of the members of the Committee administering the Scheme;(ii)

the information required in the table below for the following participants of the Scheme:(a)Participants who are directors of the Company;(b)Participants who are Controlling Shareholders and Associates of Controlling
Shareholder(s); and(c)Participants (other than those in paragraphs (a) and (b) above) who have received
Shares issued pursuant to the Awards granted under the Scheme and/or RSUs
granted under any other share option scheme or share schemes of the Company
which, in aggregate, represent 5.0% or more of the aggregate of the total numberof Shares available under the Scheme and any other share option scheme or shareschemes of the Company, collectively:

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APPENDIX I: RULES OF THE EIS

Name of
Participant

Aggregate
number of sharescomprised inAwards granted
during thefinancial year
under review(including
terms)

Aggregate
number of Sharescomprised inAwards grantedsincecommencementof the Scheme tothe end of thefinancial year
under review

Shares comprisedin Awards whichhave been issued
sincecommencementof the Scheme toend of thefinancial year
under review

Aggregate
number of
Sharescomprised inAwards whichhave not been
vested or
exercised as at
the end of thefinancial year(iii)

the names of and number and terms of Shares comprised in the Awards granted to each
Key Executive who receive 5.0% or more of the total number of Awards available to all
Key Executives under the Scheme during the financial year under review;(iv)

the aggregate number of Shares comprised in Awards granted under the Scheme to the
Key Executives for the financial year under review, and since the commencement of the
Scheme to the end of the financial year ender review; and(v)

the number and proportion of Shares comprised in Awards granted at a discount during
the financial year under review in respect of every 10% discount rate, up to the maximum
quantum of discount granted; and(vi)

any other information required to be so disclosed pursuant to the Listing Manual and allother applicable laws and requirements,

provided that if any of the above requirements are not applicable, an appropriate negative
statement should be included therein.
13.13. Scheme Construction
In the Scheme, unless otherwise stated, the following uses apply:(i)references to a statute or law refer to the statute or law and any amendments and any
successor statutes or laws, and to all valid and binding governmental regulations, court
decisions, and other regulatory and judicial authority issued or rendered thereunder, as
amended, or their successors, as in effect at the relevant time;(ii)

in computing periods from a specified date to a later specified date, the words “from” and“commencing on” (and the like) mean “from and including,” and the words “to,” “until”
and “ending on” (and the like) mean “to and including”;(iii)

indications of time of day shall be based upon the time applicable to the location of theprincipal headquarters of the Company;

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APPENDIX I: RULES OF THE EIS(iv)

the words “include,” “includes” and “including” (and the like) mean “include, without
limitation,” “includes, without limitation” and “including, without limitation” (and thelike), respectively;(v)

all references to articles and sections are to articles and sections in the Scheme;(vi)

all words used shall be construed to be of such gender or number as the circumstancesand context require;(vii)

the captions and headings of articles and sections have been inserted solely forconvenience of reference and shall not be considered a part of the Scheme, nor shall anyof them affect the meaning or interpretation of the Scheme; and(viii)

any reference to an agreement, plan, policy, form, document or set of documents, and therights and obligations of the parties under any such agreement, plan, policy, form,
document or set of documents, shall mean such agreement, plan, policy, form, document
or set of documents as amended from time to time, and any and all modifications,extensions, renewals, substitutions or replacements thereof.

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APPENDIX J: FINANCIAL TARGETS FOR EARNOUTFINANCIAL TARGETS FOR EARNOUT
Following Completion, the Purchaser shall allot and issue up to 24,408,000 Earnout Shares infavour of the Earnout Shareholders based on the following terms:
1.

The Earnout Shares shall be vested in two tranches on the Earnout Vesting Dates, namely,
30 April 2024 and 30 August 2024.

2.

Upon the release of the audited consolidated financial results of the Purchaser on SGXNET
for FY2023, where the Group Operating Revenue is equal to or more than US$320.0 million:(i)if the total V-Liver Operating Revenue is equal to or exceeds US$5.0 million, theEarnout Shareholders shall be entitled to the allotment and issuance of 4,068,000
Earnout Shares; and(ii)separately, if the Group EBITDA is equal to or exceeds US$25.0 million, the Earnout
Shareholders shall be entitled to the allotment and issuance of an additional 4,068,000
Earnout Shares.

The Purchaser shall allot and issue the above Earnout Shares to the account of the Earnout
Shareholders within 14 Market Days after 30 April 2024.
For the avoidance of doubt, if the Group Operating Revenue for FY2023 is less than
US$320.0 million, the Earnout Shareholders shall not be entitled to the allotment andissuance of any Earnout Shares under paragraphs 2(i) or 2(ii) above.
3.

Upon the release of the unaudited consolidated financial results of the Purchaser on
SGXNET for six months ending 30 June 2024 (“1H FY2024”), where the Group Operating
Revenue for 1H FY2024 is equal to or more than US$180.0 million:(i)if the total V-Liver Operating Revenue is equal to or exceeds US$6.0 million, theEarnout Shareholders shall be entitled to the allotment and issuance of 8,136,000
Earnout Shares; and(ii)separately, if the Group EBITDA is equal to or exceeds US$17.0 million, the Earnout
Shareholders shall be entitled to the allotment and issuance of an additional 8,136,000
Earnout Shares.

The Purchaser shall allot and issue the above Earnout Shares to the account of the Earnout
Shareholders within 14 Market Days after 30 August 2024.
For the avoidance of doubt, (i) if the Group Operating Revenue for 1H FY2024 is less than
US$180.0 million, the Earnout Shareholders shall not be entitled to the allotment andissuance of any Earnout Shares under paragraphs 3(i) or 3(ii) above and (ii) the
Purchaser’s financials shall be excluded from the calculation of Group Operating Revenue
and Group EBITDA for 1H FY2024 if Completion takes place in 2024.
4.

For the avoidance of doubt, if the Purchaser fails to achieve the Group Operating Revenue
stipulated under paragraph 2 but is able to meet the Group Operating Revenue stipulated
under paragraph 3, the Earnout Shareholders shall be entitled to the allotment andissuance of Earnout Shares in accordance with paragraph 3 above. Similarly, if thePurchaser fails to achieve the Group Operating Revenue stipulated under paragraph 3 but
is able to meet the Group Operating Revenue stipulated under paragraph 2, the Earnout
Shareholders shall be entitled to the allotment and issuance of Earnout Shares inaccordance with paragraph 2 above.
J-1

APPENDIX J: FINANCIAL TARGETS FOR EARNOUT
5.

The Earnout Shares to be allotted and issued in accordance with paragraphs 2 and 3 above
shall be allotted and issued to each Earnout Shareholder on a pro rata basis, by reference
to the following formula:
A =

B
x D
C

Where:A=

The Earnout Shares attributable to each Earnout Shareholder for each Earnout
Vesting DateB=

The Earnout Qualification Shares held by each Earnout Shareholder on each
Earnout Record Date, where “Earnout Qualification Shares” shall be the lowerof (i) the number of Shares held by such Earnout Shareholder on such Earnout
Record Date; or (ii) the number of Consideration Shares allotted and issued tosuch Earnout Shareholder on the Completion DateC=

The aggregate Earnout Qualification Shares held by all Earnout Shareholders oneach Earnout Record DateD=

The aggregate Earnout Shares to be allotted and issued to the Earnout
Shareholders by the Purchaser for each Earnout Vesting Date

J-2

APPENDIX K: TERMS AND CONDITIONS OF THE SPATERMS AND CONDITIONS OF THE SPA
A.

Conditions Precedent

The sale and purchase of the Sale Shares is conditional upon the satisfaction of the following
conditions (the “Conditions”), unless otherwise waived in accordance with Clause 4.4 of the SPA:(a)

no applicable laws having been enacted, amended or proposed which would prohibit,
materially restrict or materially delay the implementation of the transactions contemplated
in the SPA;(b)

the Company having obtained the approval of the SGX-ST for the Completion of the
Proposed Business Combination pursuant to the terms of the SPA and where suchapproval is subject to conditions, the compliance by the Target Company and (where
relevant) the Company to the satisfaction of the SGX-ST with all the conditions imposedby 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,
the ESOP Shares and the EIS Shares on the SGX-ST and where such approval is subject
to conditions, the compliance by the Target Company and (where relevant) the Company
to the satisfaction 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 satisfactionof the Company in its sole and absolute discretion;(e)

the Company having delivered evidence satisfactory to the Vendor that the Completion
Remaining Escrow Amount shall be no less than S$60.0 million;(f)

the Restructuring having been completed and the Vendor having provided the Company
with a written notice confirming that the Restructuring has been completed;(g)the Vendor not having received notice of any claim, action, injunction, order, directive or
notice restraining or prohibiting the entering into or the consummation of the transactions
contemplated by the SPA or seeking damages or other recourse in respect thereof, ornotice that any of the foregoing is pending or threatened;(h)there having occurred no Material Adverse Change, or any development reasonably likely
to involve a prospective Material Adverse Change, in respect of the Group, whether or notarising from transactions in the ordinary course of business subsequent to the date of the
SPA;

(i)

the Target Shareholders’ Agreement having been terminated;(j)

the Company having obtained the Company Shareholders’ Approval at the EGM for theCompletion of the Proposed Business Combination and all other transactions
contemplated pursuant to the Transaction Documents; and(k)

the Company having performed and complied with all of its undertakings in the SPA in allmaterial respects and the Company not having materially breached the undertakings in the
SPA.
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
B.

Undertakings (Clause 5 of the SPA)

1.

From the date of the SPA until Completion:(a)the Vendor undertakes to the Company that, unless otherwise directed by theCompany, it shall procure that (a) all the obligations in Part A of Section C ofAppendix K to this Circular shall be complied with at all times and (b) any and allmaterial issues identified through the legal, financial and tax due diligence conductedby the Company that may arise between the date of the SPA until Completion are
resolved or rectified to the reasonable satisfaction of the Company in its sole andabsolute discretion provided that the Vendor shall be granted sufficient notice andsufficient time to resolve or rectify any such material issues as may be requested by
the Company;(b)

the Company undertakes to the Vendor that, unless otherwise directed by the
Vendor, it shall procure that all the obligations in Part B of Section C of Appendix K
to this Circular shall be complied with at all times; and(c)each of the Vendor and the Company undertakes that it shall procure that all theobligations in Part C of Section C of Appendix K to this Circular shall be complied withat all times.

2.

The Vendor undertakes to the Company that, within three days prior to the submission of
the final Circular to SGX-ST on or around 23 October 2023, the Vendor shall provide theCompany with an addendum to the SPA setting out the confirmed number of Sale Shares
to be sold to the Company at Completion, and the number of Consideration Shares
attributable to the shareholders of the Vendor (if the Vendor so designates) receiving theConsideration Shares, such addendum when countersigned by the Company shall bedeemed incorporated in the SPA. For this purpose, the confirmed number of Sale Sharesshall comprise the aggregate of (a) the number of Basic Sale Shares, (b) the number of
17LIVE Vested RSUs which have been converted into shares in the Target Company and(c) such number of shares allotted and issued by the Target Company pursuant to theexercise and conversion of the 17LIVE Warrants, all of which comprise 100% of the issued
and paid-up share capital of the Target Company as at such date.

3.

As soon as reasonably practicable after Completion, the Target Company shall use its
commercially reasonable efforts to procure that the following subsidiaries of the Target
Company shall be wound up, liquidated or otherwise dissolved as soon as reasonably
practicable:
(a)

NEGH;

(b)

NEHK;

(c)

NEBJ;

(d)

Ichi Nana Inc.; and(e)Machipopo.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
4.

As soon as reasonably practicable after Completion:(a)the Target Company shall use its commercially reasonable efforts to provide to theCompany copies of the following documents:(i)in respect of M17 Services Vietnam Co., Ltd., a tax clearance letter or ascreenshot of the government website indicating that the company hascompleted its tax clearance; and(ii)

in respect of each of M17 Service Holding Co., Ltd. and M17 Services(Thailand) Co., Ltd., a Tor.6 form provided by the Thai Taxation Authority
recording the tax audit process for liquidation and the Department of Business
Development, Ministry of Commerce (DBD)’s affidavit stating that the relevant
entity has successfully notified the DBD of the completion of the liquidation
process and the settlement of all outstanding tax obligations;(b)the Target Company shall evaluate the Target Group’s tax position in consultation
with the Company and if the Target Company and the Company agree to change thecontracting party of the Apple Developer Program Licence Agreement entered intowith Apple from 17LIVE HK to 17LIVE Japan, the Target Company shall deliver to theCompany documentary evidence reasonably satisfactory to the Company that suchchange has been effected21; and(c)the Target Company shall procure that Liontrek shall use its commercially reasonable
efforts to obtain favourable outcome of its appeal in relation to the erroneous tax
demand of US$62,400 issued by Indian Taxation Authority for FY2021 corporate
income tax.

5.

The Target Company shall, by no later than 31 December 2035 or such earlier date as may
be required by the relevant Taxation Authority, procure that Ichi Nana Inc. Taiwan Branch
and Wave pay the intercompany service fees (in respect of which potential withholding tax
obligations or liability of up to US$1,388,000 may be incurred) to 17LIVE HK and 17LIVE
Japan.

21

In Japan, 17LIVE HK has been the entity registered under the Apple Developer Program which collects the paymentsfrom in-app purchases at Apple, but 17LIVE Japan has been the actual operating entity which pays the commission
fees to Apple for the payments from users made through Apple’s in-app purchases. Since 17LIVE Japan is not thecontracting party with Apple, it has not been able to claim input credit for its Japanese consumption tax (“JCT”)
payable in relation to the commission payments, and changing the contracting party from 17LIVE HK to 17LIVE Japan
will allow 17LIVE Japan to claim the input credit which may be applied to reduce the amount of JCT paid for corporate
income tax purposes. There is no material adverse impact on the Target Group’s business if it fails to change thecontracting party. The purpose of this clause was to ensure that the Target Group would evaluate its tax position andimprove tax efficiency as a whole, and if appropriate, take the tax advantage by changing of contracting party underthe Apple Developer Program.

K-3

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
C.

Undertakings Pending Completion

Part A: Undertakings by the Seller
1.

The Vendor undertakes to the Company that, unless (i) as permitted under the Transaction
Documents, (ii) as required by applicable law, (iii) as set out in the Disclosure Letter or the
Restructuring plan, (iv) as otherwise directed by or consented to by the Company inwriting, it shall procure that (A) each Group Company shall carry on business in theordinary course in all material respects as carried on at the date of the SPA, and (B) noneof the Group Companies shall:(a)make any change to its articles of association or constitutive document, as the casemay be;(b)create, allot, issue, sub-divide, consolidate, repay, redeem or repurchase any sharesin its share capital;(c)declare or pay, or determine to be payable, a dividend, or make a distribution,
whether in cash, shares or in kind;(d)acquire, or agree to acquire, any material asset, business or undertakings involving
consideration, expenditure or liability in each case in excess of US$3 million;(e)assume or incur any additional borrowings, or any other indebtedness in the natureof borrowings;(f)save as Disclosed in the Disclosure Letter, assume or incur any liability, obligation or
expense, actual or contingent, which, when aggregated together with such liabilities,
obligations or expenses assume or incurred during the period from the date of the
SPA to Completion, is in excess of US$3 million;(g)enter into any joint venture, partnership or agreement or arrangement for the sharingof profits or assets;(h)acquire any shares or other securities or interest in any person or other venture or
acquire any business carried on by any person;(i)grant, amend or agree to amend, the terms of any loans, indebtedness or otherfinancial facilities;(j)give a guarantee, an indemnity or similar undertaking to incur a financial or otherobligation arising by reference to a third party’s obligation or liability;(k)

not enter into a long-term, onerous, unusual or material agreement, arrangement or
obligation;(l)

not amend or terminate a material agreement, arrangement or obligation to which it
is a party or terminate any contract or commitment which is not capable of being
terminated without compensation or which is not in the ordinary course of business;(m) open or close any premises;

K-4

APPENDIX K: TERMS AND CONDITIONS OF THE SPA

2.

(n)

dispose of, sell or transfer, or create any encumbrance on or over, any material asset,
business or undertaking;(o)submit any application for any merger, amalgamation, consolidation, or similar
proceeding;(p)submit any application or petition for the winding up, administration, receivership,judicial management or any other similar proceeding;(q)enter into any transaction with a director, officer, Vendor or a person connected withany of them;(r)institute or settle any legal proceedings;(s)make any changes to the accounting procedures or principles by reference to which
the Audited Accounts or the Interim Accounts were prepared or its accounting
reference date;(t)employ, dismiss (except for cause) or materially change the terms of employment or
engagement (including any increase in salary or benefits) of any director or senior
management (being C-suite executives);(u)

not pass any shareholders’ resolution;(v)

enter into any agreement or arrangement, whether in writing or otherwise, to do anyof the foregoing or allow or permit any of the foregoing.

Without prejudice to the generality of paragraph 1 above, each of the Vendor and theTarget Company undertakes to the Company that the Vendor shall, and shall procure thateach of the Group Companies, shall:(a)co-operate with the Company to ensure the efficient continuation of management andoperations of the Group after Completion and prepare for the introduction of theCompany’s normal working procedures; or(b)provide the Company and its Representatives with reasonable access, during normal
business hours, and with reasonable advance written notice, in such manner as to
not interfere with the normal operation of the Group Companies and so long as not
restricted by applicable law, to all of the properties, books, contracts, commitments,
tax returns, records and appropriate officers and employees of the Group
Companies, in each case as the Company and its Representatives may reasonably
request solely for purposes of consummating the transactions contemplated by the
SPA. Nothing in this sub-Clause shall require the Group Companies to provide to theCompany or its Representatives any information which, in the reasonable opinion oflegal counsel of the Target Company, would result in the loss of legal professional
privilege.

K-5

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
3.

The Vendor undertakes to the Company that it will not, and it will procure the Group
Companies not to:(a)continue, re-start, enter into, initiate or participate in any Third Party Negotiations;(b)invite, induce, encourage, solicit or respond to any approach that might lead to Third
Party Negotiations;(c)invite, induce, encourage or solicit any offer or expression of interest from a Third
Party in relation to a Restricted Transaction;(d)enter into any agreement, arrangement or understanding (whether or not legallybinding) with a Third Party in connection with a Restricted Transaction; or(e)supply, disclose or otherwise make available to a Third Party any information
concerning the Vendor or any Group Company for the purpose of enabling it toevaluate, or decide whether to make an offer in connection with or otherwise pursue,
a Restricted Transaction.

Part B: Undertakings by the Company
1.

From the date of the SPA through the Completion Date, (a) the Company shall use
reasonable best efforts to ensure it remains listed as a public company on SGX-ST and(b) the Company shall promptly apply for, and shall use reasonable best efforts to cause
the Consideration Shares, Earnout Shares, Company ESOP Shares, EIS Shares andSpecial Bonus Shares to be approved for listing on SGX-ST and accepted for clearance
by CDP, subject to official notice of issuance, prior to the Completion Date.

2.

Except (i) as contemplated or permitted by the Transaction Documents, (ii) as required byapplicable law, or (iii) as consented to by the Vendor in writing, from the date of the SPA
through the Completion Date, the Company (1) shall operate its business in the ordinary
course of business and (2) shall not:(a)seek any approval from its shareholders to change, modify or amend the Escrow
Agreement or the M&AA, except as contemplated by the Transaction Documents or(ii) change, modify or amend the Escrow Agreement or its respective constitutive
document, except as expressly contemplated by the Transaction Documents;(b)(i) declare, set aside, establish a record date for, make or pay any dividend or other
distribution, payable in cash, shares, property or otherwise, with respect to any of its
share capital, (ii) split, combine, subdivide, reclassify or amend any terms of its
equity securities or (iii) redeem, repurchase, cancel or otherwise acquire or offer toredeem, repurchase, or otherwise acquire any of its equity securities;(c)merge, consolidate or amalgamate with or into, or acquire (by purchasing asubstantial portion of the assets of or any equity in, or by any other manner) or makeany advance or loan to or investment in any other Person or be acquired by any other
Person;(d)

issue or sell any debt securities or options, warrants, rights or conversion or otherrights to acquire debt securities;(e)(i) issue any equity securities, other than the issuance of equity securities of theCompany pursuant to the Transaction Documents, or (ii) grant any options, warrants,rights of conversion or other equity-based awards;
K-6

APPENDIX K: TERMS AND CONDITIONS OF THE SPA(f)settle or agree to settle any claim or action before any Governmental Authority or any
other third party or that imposes injunctive or other non-monetary relief on the
Company; or(g)enter into any agreement or otherwise make any commitment to do any action
prohibited under this paragraph 2 of Part B of Section C of Appendix K of thisCircular.

3.

From the date of the SPA through the Completion Date, the Company will not, and it willcause its affiliates and its and their respective representatives not to, directly or indirectly:(a) solicit, initiate, submit, facilitate (including by means of furnishing or disclosing
information), discuss or negotiate, directly or indirectly, any enquiry, proposal or offer(written or oral) with respect to an “initial business combination”; (b) furnish or disclose any
non-public information to any Person in connection with or that could reasonably be
expected to lead to an “initial business combination”; (c) enter into any agreement,
arrangement or understanding regarding an “initial business combination” or (d) otherwise
cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage
any effort or attempt by any Person to do or seek to do any of the foregoing.

4.

From the date of the SPA through the Completion Date, the Company will use reasonable
efforts to accurately and timely file all reports required to be filed or furnished with the
SGX-ST and otherwise comply in all material respects with its reporting obligations underapplicable laws.

Part C: Joint Covenants
1.

Each of the Vendor and the Company shall use their commercially reasonable efforts tocooperate in good faith with any Governmental Authority and to undertake promptly any
and all action required to obtain any necessary or advisable regulatory approvals,consents, actions, nonactions or waivers in connection with the Transactions(the “Regulatory Approvals”) as soon as practicable and any and all action necessary toconsummate the Transactions as contemplated hereby.

2.

With respect to each of the Regulatory Approvals and any other requests, inquiries,
actions or other proceedings by or from Governmental Authorities, each of the Vendor andthe Company shall (i) diligently and expeditiously defend and use commerciallyreasonable efforts to obtain any necessary clearance, approval, consent or Regulatory
Approval under any applicable laws prescribed or enforceable by any Governmental
Authority for the Transactions and to resolve any objections as may be asserted by any
Governmental Authority with respect to the Transactions; and (ii) cooperate fully with eachother in the defence of such matters. To the extent not prohibited by applicable law, theVendor shall promptly furnish to the Company, and the Company shall promptly furnish to
the Vendor, copies of any material, substantive notices or written communications
received by such party or any of its affiliates from any Governmental Authority with respect
to the Transactions, and each such party shall permit counsel to the other parties anopportunity to review in advance, and each such party shall consider in good faith theviews of such counsel in connection with, any proposed material, substantive written
communications by such party or its affiliates to any Governmental Authority concerning
the Transactions. Each of the Vendor and the Company agrees to make all filings, toprovide all information required of such party and to reasonably cooperate with each other,in each case, in connection with the Regulatory Approvals; provided, further, that suchparty shall not be required to provide information to the extent that (w) any applicable law
K-7

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
requires it or its affiliates to restrict or prohibit access to such information, (x) in thereasonable judgement of such party, the information is subject to confidentiality
obligations to a third party, (y) in the reasonable judgement of such party, the informationis commercially sensitive and disclosure of such information would have a material impact
on the business, results of operations or financial condition of such party, or (z) disclosureof any such information would reasonably be likely to result in the loss or waiver of theattorney-client, work product or other applicable privilege.
3.

The Company shall convene and hold an extraordinary general meeting to consider andvote upon the Transactions in accordance with the M&AA to be held as promptly as
reasonably practicable. The Company will use its reasonable best efforts to obtain the voteor consent of its Shareholders required by and in compliance with all applicable law, theMainboard Rules and the M&AA.

4.

This Circular shall include a statement to the effect that the board of directors of theCompany has recommended that the Shareholders vote in favour of the Transactions at
the EGM (the “Recommendation”) and neither the Board nor any committee thereof shallwithhold, withdraw, qualify, amend or modify, or publicly propose or resolve to withhold,withdraw, qualify, amend or modify, the Recommendation.

5.

Unless otherwise consented to in writing by each of the Company and the Vendor (whichconsent shall not be unreasonably withheld, conditioned or delayed), the Company shallnot permit any amendment or modification to be made to, any waiver (in whole or in part)or provide consent to (including consent to termination), any provision or remedy under,or any replacements of, any of the PIPE Subscription Agreements. Each of the parties
shall use its commercially reasonable efforts to take, or cause to be taken, all actions anddo, or cause to be done, all things necessary, proper or advisable to consummate thetransactions contemplated by the PIPE Subscription Agreements on the terms andconditions described therein, including maintaining in effect the PIPE Subscription
Agreements and to: (a) satisfy on a timely basis all conditions and covenants applicable
to it in the PIPE Subscription Agreements and otherwise comply with its obligations
thereunder, (b) without limiting the rights of any party to enforce certain of such PIPE
Subscription Agreements in the event that all conditions in the PIPE Subscription
Agreements (other than conditions that the Company or any of its affiliates control thesatisfaction of and other than those conditions that by their nature are to be satisfied at theclosings under the PIPE Subscription Agreements) have been satisfied, consummate thetransactions contemplated by the PIPE Subscription Agreements at or prior to Completion;(c) confer with each other regarding timing of the expected closings under the PIPE
Subscription Agreements; and (d) deliver notices to the applicable counterparties to the
PIPE Subscription Agreements sufficiently in advance of Completion to cause them to fundtheir obligations as far in advance of Completion as permitted by the PIPE Subscription
Agreements. Without limiting the generality of the foregoing, the Company and the Vendor,
as applicable, shall each give the other party prompt written notice: (A) of any breach ordefault (or any event or circumstance that, with or without notice, lapse of time or both,
could give rise to any breach or default) by any party to any PIPE Subscription Agreement
known to the Company or the Vendor, as applicable; (B) of the receipt of any notice orother communication from any party to any PIPE Subscription Agreement to the Company
or the Vendor, as applicable, with respect to any actual, potential, threatened or claimed
expiration, lapse, withdrawal, material breach, material default, termination or repudiation
by any party to any PIPE Subscription Agreement or any provisions of any PIPE
Subscription Agreement; and (C) if the Company or the Vendor, as applicable, does notexpect the Company to receive, all or any portion of the investment amount for the PIPE
K-8

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
Shares on the terms, in the manner or from the private investors as contemplated by the
PIPE Subscription Agreements. The Company and the Vendor shall take all actions
required under the PIPE Subscription Agreements with respect to the timely book-entry or
issuance and delivery of any physical certificates evidencing the PIPE Shares as andwhen required under any such PIPE Subscription Agreements. Each party shall use its
reasonable efforts to, and shall instruct its financial advisers to, keep the other parties andthe other parties’ financial advisers reasonably informed with respect to the PIPE
Financing during such period, including by (i) providing regular updates and (ii) consulting
and cooperating with, and considering in good faith any feedback from, the other partiesor the other parties’ financial advisers with respect to the PIPE Financing.
Representations and Warranties22

D.

Part A: Warrantor Warranties
1.

CAPACITY AND AUTHORITY

1.1.

The Vendor is a limited liability company incorporated under the laws of its jurisdiction ofincorporation, and has been in continuous existence since incorporation.

22

In relation to these representations and warranties, the Disclosure Letter (which is made available for public
inspection at the principal place of business of the Company during normal business hours for a period of six months
from the date of this Circular) was delivered to the Company. For ease of reference, the material information set out
in the Disclosure Letter and the references to the corresponding disclosure in the Circular sections are set out below:
1.

RSUs of the Target Company: A breakdown of the 17LIVE Vested RSUs and the 17LIVE Unvested RSUs are set
out in Section 12.1 titled “Proposed Adoption of the Company Employee Share Option Plan – Rationale of theCompany ESOP” of this Circular.

2.

Share capital of the Target Company: A breakdown of the share capital of the Target Company and the changes
in the issued share capital of the Target Company are set out in Section 23.4 titled “Enlarged Group Corporate
and Shareholding Structure – Share Capital of the Target Company” of this Circular.

3.

Share Exchange Agreement and Restructuring: The contemplated Restructuring prior to Completion of the
Proposed Business Combination is set out in Section 23.4 titled “Enlarged Group Corporate and Shareholding
Structure – Share Capital of the Target Company” of this Circular.

4.

Subsidiaries of the Target Company: A list of the subsidiaries of the Target Company is set out Section 23.3 titled“Enlarged Group Corporate and Shareholding Structure – Corporate Structure of the Enlarged Group after
Completion” of this Circular.

5.

Submission of reports to the PSA: The failure by the Target Company to submit reports pursuant to the PSA is
set out in Section 16.2 titled “Risk Factors – Risks relating to Doing Business in Jurisdictions in which the Target
Group Operates” of this Circular.

6.

Permanent Establishment: The permanent establishment risk for profits of operating entities is set out in Section
16.2 titled “Risk Factors – Risks relating to Doing Business in Jurisdictions in which the Target Group Operates”
of this Circular.

7.

PRC tax liability: The failure by the Target Group to complete Bulletin 7 tax reporting is set out in Section 16.2
titled “Risk Factors – Risks relating to Doing Business in Jurisdictions in which the Target Group Operates” of thisCircular.

8.

Japan tax audit: The tax audit by NTA with respect to JCT is set out in Section 16.2 titled “Risk Factors – Risks
relating to Doing Business in Jurisdictions in which the Target Group Operates” of this Circular.

9.

Winding up of subsidiaries of the Target Company: A list of subsidiaries of the Target Company to be wound up
is set out in this Appendix K titled “Terms and Conditions of the SPA” of this Circular.

10. Share repurchases by the Target Company: The share repurchases by the Target Company is set out in Section
23.4 (Share Capital of the Target Company) of the Circular.
11. Company ESOP: An overview of the Company ESOP is set out in Section 12.2 (Overview of the Company ESOP)of the Circular.

K-9

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
1.2.

The Vendor has full power and authority to enter into and perform the SPA and each of theTransaction Documents to which it is a party, and the SPA and each of the Transaction
Documents constitutes or will when executed, constitute binding obligations on the Vendor
in accordance with their terms.

1.3.

Upon the completion of the Restructuring, the Vendor has the right, power and authority
to transfer the Sale Shares, free from any lien, charge, equity, encumbrance, or third party
interest of any nature whatsoever and together with all rights of any nature attaching or
accruing to them.

1.4.

The Vendor has obtained all applicable governmental, statutory, regulatory or otherconsents, authorisations, approvals, licenses, waivers or exemptions required to empower
them to enter into and to perform its obligations under the SPA and the Transaction
Documents.

2.

THE SALE SHARES AND THE GROUP COMPANIES

2.1.

Upon the completion of the Restructuring, the Vendor will be the sole legal and beneficial
owner of the Sale Shares. The Sale Shares shall on Completion be properly and validly
transferred to the Company in accordance with Applicable Law and free from all
Encumbrances.

2.2.

Save as Disclosed in the Disclosure Letter, other than the SPA, there is no agreement,
arrangement or obligation requiring the creation, allotment, issue, transfer, redemption or
repayment of, or the grant to a person of the right to require the allotment, issue, transfer,redemption or payment of, any shares or other similar equity interest in the capital of any
Group Company (including an option or right of pre-emption or conversion).

2.3.

Save as Disclosed in the Disclosure Letter, other than as set out in the SPA, the Company
has no other Subsidiaries or associated companies, or interests in any other entity(whether incorporated or unincorporated).

3.

INFORMATION

3.1.

The corporate information and particulars in respect of each Group Company set out in the
SPA is true, accurate and not misleading.

3.2.

All information contained in any document or communication (whether oral or written)
which has been given or made available by or on behalf of the Vendor, the Target
Company or their respective Representatives to the Company or the Company’s
Representatives in the course of the negotiations leading to the SPA and due diligence
investigations carried out by or on behalf of the Company was so given or made available
in full and in good faith (and to the extent such information is required to be updated oramended in order to ensure that such information remains accurate as set forth below,
such amended or new information has been provided to the relevant parties) and was,when given (as amended or supplemented), and remains (as amended or supplemented),
true, complete and accurate in all respects and does not contain any untrue statement ofa material fact or omit to state a material fact necessary in order to make such information,in the light of the circumstances under which they were made not misleading whether
because of any omission or ambiguity or for any other reason. The Warrantors are notaware of any fact or matter not Disclosed to the Company which renders any suchinformation untrue, inaccurate or misleading or the disclosure of which might affect the
K-10

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
valuation of the Target Company or the willingness of the Company to purchase the Sale
Shares from the Vendor, on the terms of the SPA or the price at or terms upon which theCompany would be willing to purchase the Sale Shares.
4.

SELLER CIRCULAR SECTIONS

4.1.

Each of the Vendor Circular Sections (as at the date of issuance to the Shareholders andthe Completion Date), the draft copy of the Vendor Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents as it
relates to the Group Companies (as at their respective dates of issuance) contains, andin the case of any amendment or supplement to the Circular as at the date of its issuanceto the Shareholders and the Completion Date will contain, all information that
Shareholders and their professional advisers would reasonably require and reasonably
expect to find there, or that is necessary to enable Shareholders and their advisers tomake a properly informed assessment of the merits and risks of the Proposed Business
Combination and the PIPE Financing, including, without limitation, the assets andliabilities, financial position, profits and losses and prospects of the Group Companies.

4.2.

Each of the Vendor Circular Sections (as at the date of issuance to the Shareholders andthe Completion Date), the draft copy of the Vendor Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents as it
relates to the Group Companies (as at their respective dates of issuance) does not, andwill not, and in the case of any amendment or supplement to the Circular as at the dateof its issuance to the Shareholders and the Completion Date does not, contain any untrue
statement of a material fact or omit to state any fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.

4.3.

Each of the Vendor Circular Sections (as at the date of issuance to the Shareholders andthe Completion Date), the draft copy of the Vendor Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents(as at their respective dates of issuance) contains, and in the case of any amendment or
supplement to the Circular as at the date of its issuance to the Shareholders and theCompletion Date will contain, all particulars and information required by, and is incompliance with all applicable provisions of, the SFA, the Mainboard Rules and all otherrequirements of the SGX-ST and the MAS. The statements of intention, opinion, belief or
expectation contained in the Vendor Circular Sections (as at the date of issuance to the
Shareholders and the Completion Date), the draft copy of the Vendor Circular Sections(as at the date of submission to the SGX-ST for review), the PIPE Financing marketing
documents (as at their respective dates of issuance) and the SPA are, and in the case of
any amendment or supplement to the Circular at the date of its issuance to the
Shareholders and the Completion Date will be made after due, careful and properconsideration and, where appropriate, are based on assumptions referred to in each of the
Vendor Circular Sections (as at the date of issuance to the Shareholders and theCompletion Date), the draft copy of the Vendor Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents(as at their respective dates of issuance) and represent reasonable and fair expectations
based on all relevant facts known or which ought reasonably to have been known by the
Vendor and given in good faith after due and careful enquiry.

K-11

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
5.

CORPORATE RECORDS

5.1.

Save as Disclosed in the Disclosure Letter, the copies of the articles of association (or theequivalent constitutive documents) of each Group Company Disclosed to the Company or
its Representatives are true, accurate and complete in all respects and contain full detailsof the rights and restrictions attached to the share capital of each Group Company. Copiesof all the resolutions and agreements (including without limitation, shareholders’agreements, voting agreements, etc.) required to be annexed to or incorporated in thearticles of association (or the equivalent constitutive documents) of each Group Company
by the law applicable are annexed or incorporated and there have been no amendments
to such articles of association (or the equivalent constitutive documents) since the datehereof.

5.2.

Save as Disclosed in the Disclosure Letter, the statutory records, registers and books(including minute books) and the books of account of each Group Company have been
properly kept, are duly entered and maintained in accordance with all legal requirements
applicable thereto and contain true, full and accurate records of all matters required to be
dealt with therein and all such books and all records and documents (including documentsof title and copies of all subsisting agreements to which each Group Company is a party)
are its property, in its possession or under its control.

5.3.

No Group Company has received any notice of any application or intended application
under any applicable legislation for the rectification of its statutory records, registers
and/or books.

5.4.

Save as Disclosed in the Disclosure Letter, all returns, particulars, resolutions and otherdocuments which each Group Company is required by law to file with or deliver to any
authority in any jurisdiction have been correctly made up and filed or, as the case may be,delivered. In particular, all charges in favour of each Group Company have (if appropriate)
been registered in accordance with the provisions of any applicable legislation.

5.5.

No Group Company has given a power of attorney or other authority by which a person
may enter into an agreement, arrangement or obligation on the relevant Group Company’s
behalf (other than an authority for a director, other officer or employee to enter into anagreement in the usual course of that person’s duties).

6.

ACCOUNTS

6.1.

Save as Disclosed in the Audited Accounts and the Interim Accounts have been preparedin accordance with all Applicable Laws and the IFRS.

6.2.

The Audited Accounts have been audited by an auditor or firm of accountants qualified toact as auditors in the relevant jurisdictions and the auditors’ report(s) required to beannexed to the Audited Accounts is unqualified.

6.3.

Save as Disclosed in the Disclosure Letter, the Audited Accounts and the Interim Accounts
give a true and fair view of the state of affairs and the assets and liabilities of each Group
Company as at the date of the Audited Accounts and the Interim Accounts respectively andthe profits and losses, changes in equity and cash flows of each Group Company for the
relevant financial period.

K-12

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
6.4.

6.5.

The Audited Accounts and the Interim Accounts make:(a)full provision for all actual liabilities;(b)

proper and adequate provision for (or note in accordance with good accountancy
practice) all contingent liabilities;(c)proper and adequate provision or reserve for all bad and doubtful debts; and(d)due provision for depreciation and amortisation and for any obsolescence of assets.

Full provision or reserve has been made in the Audited Accounts and the Interim Accounts
for all Taxation liable to be assessed on each Group Company or for which it is or may
become accountable in respect of:(a)profits, gains or income (as computed for Taxation purposes) arising or accruing or
deemed to arise or accrue on or before the date of the Audited Accounts and/or theInterim Accounts respectively;(b)

any transactions effected or deemed to be effected on or before the date of the
Audited Accounts and/or the Interim Accounts respectively or provided for in the
Audited Accounts and/or the Interim Accounts respectively;(c)

distributions made or deemed to be made on or before the date of the Audited
Accounts and/or the Interim Accounts respectively or provided for in the Audited
Accounts and/or the Interim Accounts respectively; and(d)deferred Taxation.

6.6.

The profits and losses of the Target Company and its Subsidiaries for the financial year
ended on the Last Accounting Date as shown by the Audited Accounts and the Interim
Accounts and the trend of profits thereby shown have not (except as therein Disclosed)
been affected by inconsistencies of accounting practices, by the inclusion of unusual or
non-recurring items of income or expenditure, by transactions entered into otherwise thanon normal commercial terms or by any other factors rendering such profits for all or anyof such periods exceptionally high or low (other than as Disclosed in the relevant
accounts).

6.7.

The Interim Accounts have been prepared on a basis consistent with the Audited Accounts
without any changes in accounting policies used.

6.8.

The Interim Accounts have been prepared on a basis consistent with the Audited Accounts
and there has been no revaluation of any assets, fixed or otherwise, from the value of
those assets stated in the Audited Accounts.

7.

TRANSACTIONS AFFECTING THE AUDITED ACCOUNTS AND INTERIM ACCOUNTS

7.1.

No Group Company has any outstanding loan capital, and none of them have factored anyof their debts, or engaged in financing of a type which would not be required to be shownor reflected in the Audited Accounts and the Interim Accounts or borrowed any money
which has not repaid, save as Disclosed in the relevant accounts.

K-13

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
7.2.

There are no liabilities (including contingent liabilities) which are outstanding on the partof any of the Group Companies, other than those liabilities Disclosed in the Audited
Accounts and the Interim Accounts or which have arisen in the ordinary course of businesssince the date of the Audited Accounts and the Interim Accounts respectively.

7.3.

No transaction of any importance to which a Group Company has been party has takenplace which, if it had taken place on or before the date of the Audited Accounts or theInterim Accounts, would have been required to be Disclosed or reflected in the Audited
Accounts or the Interim Accounts, as the case may be.

7.4.

Revenue costs of an occasional or seasonal nature (including any holiday pay, closure andredundancy costs of fixed-term projects or contracts, bonuses, customer rebates, excess
use charges under leasing agreements and maintenance, repairs and renewals) were
accrued so as to match them as closely as possible to the related income and provided in
the Audited Accounts and the Interim Accounts to the extent of the accrual as at the dateof the Audited Accounts and the Interim Accounts respectively.

7.5.

No value was attributed in the Audited Accounts and the Interim Accounts to any asset
which was not beneficially owned by a Group Company at the date of the Audited Accounts
or the Interim Accounts, as the case may be, or which in the case of fixed assets, were notin full and exclusive use for the purposes of the relevant Group Company’s business.

8.

CHANGES SINCE THE AUDITED ACCOUNTS DATE

8.1.

Since the Last Accounting Date as regards each Group Company:(a)its business has been lawfully carried on in the ordinary course and so as to maintainthe same as a going concern;(b)save as Disclosed in the Disclosure Letter, it has not acquired or disposed of any
assets or assumed or incurred any liabilities (including contingent liabilities) or
agreed to do any of the foregoing otherwise than in the ordinary course of carrying
on its business;(c)

its business has not been adversely affected by the loss of any important customer,
streamer, streamer’s agency or source of supply or by any abnormal factor notaffecting similar businesses to a like extent or by any other cause and the Warrantors
are not aware of any facts which are likely to give rise to any such effects;(d)no dividend or other distribution has been, or agreed to be, declared, made or paid
to its members except as provided for in the Audited Accounts;(e)neither its turnover, trading position nor net profit before tax has deteriorated;(f)no change has been made in the emoluments or other terms of employment of its
directors or any of its employees;(g)it has not borrowed any money or issued any guarantee or created any Encumbrance
over any asset other than as Disclosed in the Audited Accounts;(h)no share or loan capital has been allotted, issued, repaid or redeemed and noagreement or arrangement has been made to do any of the foregoing;
K-14

APPENDIX K: TERMS AND CONDITIONS OF THE SPA(i)there has been no unusual change in the number of monthly active streamers,
monthly active users and paying users;(j)

it has not entered into any unusual, long term or onerous commitments or contracts;(k)save as Disclosed in the Disclosure Letter, after making due and careful enquiries,
it has not learnt of any circumstance making bad or doubtful any of its book debts;(l)it has not entered into either a lease of or a license to assign any of its Property orat any time assigned or otherwise disposed of all or any part of the its Property
otherwise than in the ordinary course of carrying on its business;(m) it has not made or agreed to make any payment other than routine payments in theordinary and usual course of trading;(n)it has not by reason of any default by it or any other person in any of its obligations
become bound or liable to be called upon to repay prematurely any loan capital or
borrowed moneys or other forms of indebtedness or pay under any guarantee,
indemnity or other forms of liability;(o)it has not released any debtor on terms that the debtor pays less than the book valueof its debt and no debt owing to it has been deferred, subordinated or written off or
has proved to any extent irrecoverable;(p)there has been no Material Adverse Change and no event, fact or matter has
occurred or is likely to occur which will or is likely to give rise to any such change;(q)there has been no Material Adverse Change in its working capital requirements;(r)

it has not knowingly waived or released any proprietary rights howsoever arising;(s)

it has not acquired or disposed of or granted any right or option or created any otherEncumbrance, save for those created pursuant to the SPA;(t)

no resolution has been passed and nothing has been done in the conduct ormanagement of the affairs of the Group Company which would be likely to reduce thenet asset value of the Group Company;(u)no change has been made to the accounting practices adopted in relation to theGroup Company and the accounting practices adopted for the Group Company are
consistent with those adopted in the Audited Accounts;(v)

it has not changed its accounting reference period; and(w) no claim sounding in damages has been made against the Group Company.
9.

TAXATION

9.1.

Each Group Company is and has at all times been resident only in its country ofincorporation for all Taxation purposes. To the best of the Warrantors’ knowledge, noGroup Company has been determined by the relevant Taxation Authority as having
established a permanent establishment or other place of business in any jurisdiction other
K-15

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
than its country of incorporation. In particular, no determination has been made by theJapanese Taxation Authority that Ichi Nana Inc. has established a permanentestablishment in Japan for tax purposes and Ichi Nana Inc. has not been required to beregistered as a foreign company in Japan.
9.2.

Save as Disclosed in the Disclosure Letter, without prejudice to any other provision of the
SPA, there is no liability to Taxation in respect of, as a result of or in consequence of any
claim for Taxation which has been made or may hereafter be made:(a)in respect of or arising from any transaction effected or deemed to have beeneffected on or before Completion; or(b)by reference to any income, profits or gains earned, accrued or received on or before
Completion,

except:(i)to the extent that provision or reserve specifically in respect thereof was made in the
Audited Accounts or the Interim Accounts;(ii)

in respect of Taxation attributable to transactions arising out of the ordinary courseof the normal business of a Group Company; and(iii) to the extent that such claim arises as a result only of any provision or reserve inrespect thereof being insufficient by reason of any increase in rates of Taxation madeafter the date hereof with retrospective effect,
and there are no circumstances likely to give rise to such a liability.
9.3.

There are no outstanding Tax liabilities in respect of the M17 Services Vietnam Co., Ltd.,
17 Service Holding Co., Ltd. and M17 Services (Thailand) Co., Ltd..

9.4.

No Group Company is or will become, liable to pay, or make reimbursement or indemnity
in respect of, any Taxation (or amounts corresponding thereto) as a consequence of the
failure by any other person to discharge that Taxation within any specified period orotherwise, where such Taxation relates to a profit, income or gain, transaction, event,omission or circumstance arising, occurring or deemed to arise or occur (whether whollyor partly) prior to Completion.

9.5.

Save as Disclosed in the Disclosure Letter, no relief (whether by way of deduction,
reduction, set-off, exemption, postponement, roll-over, repayment or allowance orotherwise) from, against or in respect of any Taxation has been claimed and/or given to a
Group Company which could or might be effectively withdrawn, postponed, restricted,
clawed back or otherwise lost as a result of any act, omission, event or circumstancearising or occurring prior to or on Completion. In particular:(a)the unutilised tax losses amounting to US$33.5 million of Ichi Nana Inc. Taiwan
Branch has not been recognised as deferred tax losses in the Audited Accounts dueto the potential forfeiture of the same;(b)

the unutilised tax losses amounting to US$5.1 million of NETW has not beenrecognised as deferred tax losses in the Audited Accounts due to the potential
K-16

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
forfeiture of the same upon the winding up, deregistration or dissolution of Next
Entertainment Limited Taiwan Branch;(c)the unutilised tax losses amounting to US$3.4 million of Wave has not beenrecognised as deferred tax losses in the Audited Accounts due to the potential
forfeiture of the same;(d)the unutilised tax losses amounting to US$5.5 million of 17LIVE HK has not beenrecognised as deferred tax losses in the Audited Accounts due to the potential
forfeiture of the same; and(e)

Liontrek is not subject to any potential disallowance of the tax losses amounting to
US$225,000 utilised by it.

9.6.

Save as Disclosed in the Disclosure Letter, all returns, accounts, computations, notices
and information which are or have been required to be made, given or delivered by aGroup Company for any Taxation purpose (i) have been made, given or delivered within
the requisite periods or within permitted extensions of such periods, (ii) are up-to-date,complete and accurate and made on a proper basis, and (iii) none of them is, or is likely
to be, the subject of any dispute with the Taxation Authority and the Tax returns will notgive rise to any assessment, adjustment or set-off (including any claim for interest on
unpaid Tax) by the relevant Taxation Authority. In particular, Ichi Nana Inc. Taiwan Branch
has settled the additional corporate income tax payable for FY2016 to FY2020 with the
Taiwan tax authority.

9.7.

No transaction has been effected since the Last Accounting Date by a Group Company inrespect of which any consent or clearance from the Taxation Authority was or will be
required or was or could have been sought (i) without such consent or clearance having
been validly obtained before the transaction was effected, (ii) otherwise than inaccordance with the terms of and so as to satisfy any conditions attached to such consent
or clearance, and (iii) otherwise than at a time when and in circumstances in which suchconsent or clearance was and will be valid and effective.

9.8.

All particulars furnished to the Taxation Authority in connection with any application forconsent or clearance by a Group Company since the Last Accounting Date fully andaccurately disclosed all facts and circumstances material to the decision of the Taxation
Authority.

9.9.

There are no circumstances that have arisen since the making of any application for any
such consent or clearance which might reasonably be expected to cause such consent orclearance to be or become invalid or to be withdrawn by the Taxation Authority.

9.10.

No Group Company has since the Last Accounting Date taken any action which has had,or will have, the result of altering, prejudicing or in any way disturbing any arrangement oragreement between a Group Company and the Taxation Authority.

9.11.

All Taxes assessed or imposed by any government or governmental or statutory bodywhich have been or will be assessed upon a Group Company in relation to periods on or
before Completion have been or will be paid on or before the relevant due date forpayment.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
9.12.

Save as Disclosed in the Disclosure Letter, there is no further liability or contingent liability
for Taxation otherwise than as a result of operating activities in the ordinary course of aGroup Company’s business since the Last Accounting Date. No Group Company hasreceived any notice, inquiry, or internal or external allegation from Taiwan Taxation
Authority in respect of the transfer of know-how from Ichi Nana Inc. Taiwan Branch to
17LIVE Services Inc. in September 2021 (the “Spin-off”). To the best of the Warrantors’knowledge, any potential corporate income tax and value-added tax liability on 17LIVE
Taiwan (in its capacity as the successor entity of Ichi Nana Inc. Taiwan Branch) in respectof the Spin-off would not result in a Material Adverse Change.

9.13.

Each Group Company has made all deductions and withholdings in respect or on accountof Taxation which it is required or entitled by any relevant legislation to make from any
payments made by it including, but not limited to, interest, annuities or other annual
payments, royalties, rent, remuneration, payments to employees or sub-contractors or
payments to a non-resident and each has accounted in full to the relevant Taxation
Authority for any Taxation so deducted or withheld. In particular:(a)the intercompany service fees payable by Ichi Nana Inc. Taiwan Branch and Wave to
17LIVE HK and 17LIVE Japan (in respect of which potential withholding tax
obligations or liability of up to US$1,388,000 may be incurred) are classified under
Civil Law No. 125 with a 15-years request period23;(b)

there are no potential withholding tax obligations or liability on Ichi Nana Inc. Taiwan
Branch, 17LIVE Services Inc. and Wave for intercompany service fees payable to
17LIVE Japan; and(c)there are no potential withholding tax obligations or liability on NETW forintercompany payables.

9.14.

Proper records have been maintained in respect of all such deductions and withholdings
and all regulations applicable thereto have been complied with.

9.15.

No Group Company owns, or has agreed to acquire, any asset, and no Group Company
has received or agreed to receive any services or facilities (including without limitation, thebenefit of any licences or agreements), the consideration for the acquisition or provisionof which was or will be in excess of its market value, or otherwise than on an arm’s length
basis.

9.16.

No Group Company has disposed, or agreed to dispose, of any assets, and has notprovided or agreed to provide any services or facilities (including without limitation, thebenefit of any licences) which was or will be less than its market value, or otherwise thanon an arm’s length basis.

23

The Target Group represented to the Company that the relevant unpaid intercompany service fees are classified
under Taiwan’s Civil Law No. 125 with a 15-year request period (i.e. creditors have a period of 15 years to request
for such account payable to be paid). The Target Group had represented to the Company that, having considered the
cash tax impact (Corporate Income Tax vs Withholding Tax), it plans to have the intercompany services fee paid andrecognise the account payable as other income at such point where there will be tax efficiencies in doing so (forexample, in a deficit year), but in any case within 15 years from 2020. Accordingly, the Company had included thisundertaking in the SPA to ensure that such intercompany services are paid within 15 years from 2020. The purposeof this clause was to ensure that the Target Group would evaluate its tax position and improve tax efficiency as awhole, and there is no material adverse implication on the Target Company’s business if it fails to have theintercompany services paid and recognise the account payable as other income.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
9.17.

No asset owned by a Group Company has at any time since its acquisition been subject
to a reduction in value such that any allowable loss arising on its disposal is likely to be
reduced or eliminated or any chargeable gain arising on its disposal is likely to be
increased.

9.18.

No Group Company nor any of its directors or officers has paid, or become liable to pay,
any fine, penalty or interest charged by virtue of any statutory provision relating toTaxation.

9.19.

No Group Company has since the Last Accounting Date engaged in, been a party to, or
been otherwise involved in any transaction or series of transactions or scheme orarrangement of which the main purpose, or one of the main purposes, was or may beperceived to be the evasion of or avoidance of, or deferral of or a reduction in the liability
to, Taxation, in contravention of any applicable laws.

9.20.

Save as Disclosed in the Disclosure Letter, no Group Company been the subject of aninvestigation, discovery or access order by or involving any Taxation Authority and there
are no circumstances existing which make it likely that an investigation, discovery or order
will be made.

9.21.

Save as Disclosed in the Disclosure Letter, each Group Company is in compliance with allapplicable transfer pricing laws and regulations, including the execution and maintenanceof contemporaneous documentation substantiating its transfer pricing practices andmethodology. The prices for any intercompany loans and balances, good or service
provided by or to each Group Company are at arm’s length price for the purposes of all
applicable transfer pricing laws.

9.22.

In relation to stamp duty assessable or payable in the jurisdictions where any Group
Company carries out its business, save for the documents in respect of the transactions
contemplated under the SPA which are subject to stamp duty, all documents of which theenforcement each Group Company may, in such Group Company’s opinion, be reasonablyinterested in have been duly stamped.

9.23.

17LIVE SEA has completed Singapore goods and services tax (“GST”) registration andthere is no Singapore GST due and payable by 17LIVE SEA as of the date of the SPA.

10.

DEBTS TO, AND CONTRACTS WITH, CONNECTED PERSONS

10.1.

Save as Disclosed in the Audited Accounts or the Interim Accounts, there are:(a)no loans or quasi-loans made by a Group Company to, and no debts (whether or notdue for payment and including contingent liabilities) other than debts which havearisen in the ordinary course of business or unfulfilled obligations (present or future,
actual or contingent) owing by the Target Company to any director, officer, employee
or shareholder of a Group Company or any person connected to any of them;(b)no credit transactions by a Group Company acting as creditor for the benefit of any
director, officer, employee or shareholder of a Group Company or any person
connected to any of them;(c)no debts owing by a Group Company other than debts which have arisen in theordinary course of business;
K-19

APPENDIX K: TERMS AND CONDITIONS OF THE SPA(d)no securities given by or to a Group Company (including guarantees or indemnities)
for any such loans, quasi-loans, credit transactions or debts as aforesaid; and(e)no claim or circumstance which may give rise to a claim against a Group Company
by any director, officer, employee or shareholder of a Group Company or any person
connected to any of them.

10.2.

There is no contract, arrangement or understanding to which a Group Company is a party
or by which it is bound which is not on entirely arm’s length terms.

10.3.

Save as Disclosed in the Audited Accounts or the Interim Accounts, none of the book debts
which are included in the Audited Accounts or the Interim Accounts or which have arisen
after the Last Accounting Date have been outstanding for more than three months fromtheir due dates for payment and each such debt has realised or will realise in the normal
course of collection its full value as included in the Audited Accounts or the Interim
Accounts or in the books of a Group Company after taking into account any provision forsuch debt made in the Audited Accounts or the Interim Accounts.

10.4.

The share repurchase agreement between Li-Tchen Huang and the Target Company dated
10 November 2020 has been terminated and the parties thereto have entered into a deedof release dated 5 September 2023 to the effect that are no further claims against theGroup Companies for any payments, claims, outstandings or liability whatsoever.

11.

INDEBTEDNESS AND WORKING CAPITAL

11.1.

Save as Disclosed in the Disclosure Letter, and the Audited Accounts or the Interim
Accounts, no Group Company has outstanding, and no Group Company has agreed tocreate or incur, loan capital, borrowings or indebtedness in the nature of borrowings.

11.2.

The total borrowings of any member of the Group does not exceed any limitations on suchmember’s borrowing powers contained in the constitution (or the equivalent constitutive
documents) of the relevant member of the Group or in any debenture or other deed or
document binding on such member.

11.3.

Save as Disclosed in the Disclosure Letter, no Group Company is a party to any loan
agreement, facility letter or other agreement for the provision of credit or financing
facilities to it or any agreement for the sale, factoring or discounting of debts.

11.4.

No Group Company engaged in any borrowing or financing transaction or arrangement
which does not appear as borrowings in the Audited Accounts.

11.5.

No Group Company has lent any money that has not been repaid and there are no debts
owing to a Group Company other than debts that have arisen in the normal course ofbusiness.

11.6.

The debts owing to each Group Company shown in the Audited Accounts and the Interim
Accounts were paid in full on the date they became due (except for any provision for bador doubtful debts made in the Audited Accounts and the Interim Accounts).

11.7.

All other debts owing to a Group Company are or will be recoverable in full as and when
they fall due.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
11.8.

Each Group Company shall be free of any debt or liability of any nature whatsoever(whether actual, contingent or otherwise) as at the Completion Date (other than debts thathave arisen in the normal course of business).

11.9.

No Group Company given or entered into or undertaken to give or enter into any
guarantee, Encumbrances or other security agreement or arrangement for the liability,
borrowings or other obligations of any person and no Group Company is responsible forthe indebtedness or the default in performance of any person.

11.10. Save as Disclosed in the Disclosure Letter, no event has occurred or been alleged to haveoccurred and no circumstances have arisen which:(a)constitutes an event of default as defined under a loan agreement, facility letter orother agreement for the provision of credit or financing facilities, or otherwise gives
rise to an obligation to repay (prematurely or otherwise), under an agreement relating
to borrowing or indebtedness in the nature of borrowing (or will do so with the givingof notice or lapse of time or both);(b)will lead to an Encumbrance constituted or created in connection with borrowing or
indebtedness in the nature of borrowing, a guarantee, an indemnity, or otherobligation of a Group Company becoming enforceable (or will do so with the givingof notice or lapse of time or both);(c)would entitle a provider of finance to a Group Company (other than on a normal
overdraft facility) to call in the whole or any part of the monies advanced or to enforce
its security (or will do so with the giving of notice or lapse of time or both); or(d)would entitle a provider of finance to a Group Company to withdraw, reduce or not
renew any existing facilities to a Group Company or alter any terms thereof to a
Group Company’s disadvantage.

11.11. The change in the shareholdings of the Target Company upon Completion will not:(a)result in the termination of or materially affect any financial agreement or
arrangement to which a Group Company is a party or subject; or(b)result in any indebtedness of a Group Company becoming due, or capable of being
declared due and payable, prior to its stated maturity.

11.12. The Target Company has sufficient working capital available to meet its ongoing working
capital requirements.
11.13. Having regard to the existing working capital available to it, each Group Company has
sufficient working capital for the purposes of:(a)continuing to carry on its business in its present form and at its present level ofturnover; and(b)executing, carrying out and fulfilling in accordance with their respective terms allorders, projects and contractual obligations which have been placed with orundertaken by such member.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
12.

ASSETS

12.1.

All assets (including all intangible assets) owned, held or used by and all debts due toeach Group Company which are included in the Audited Accounts or the Interim Accounts
or have otherwise been represented as being the property of and due to a Group
Company:(a)are legally and beneficially owned by it free from any Encumbrance; and(b)

are in its possession or under its exclusive control.

12.2.

There is no Encumbrance on, over or affecting the whole or any part of the undertaking,assets or debts of a Group Company (including, where appropriate, its investment in its
Subsidiaries or associated companies) and there is no agreement or commitment to giveor create any Encumbrance and no claim has been made by any person to be entitled toany Encumbrance.

12.3.

Each Group Company has good and marketable title to all the assets owned by it.

12.4.

The assets owned by each Group Company comprise all the assets necessary to enable
the relevant Group Company to carry on its business fully and effectively in the ordinary
course as carried on up to and as at the date of the SPA and no such assets are usedwholly or partly for any purpose other than the Group’s business.

12.5.

All assets owned or used by a Group Company which are subject to a requirement oflicensing or registration of ownership, possession or use are duly licensed or registered inits sole name.

12.6.

All plant, machinery, equipment and vehicles owned or used by each Group Company arein good and safe repair and condition having regard to their respective age, have been
regularly and properly maintained, are suitable for the purposes of which they are used
and intended and are in working order, and none is in a dangerous or (in the case ofvehicles) unroadworthy condition or in need of renewal or replacement.

12.7.

All maintenance contracts (i) in respect of assets of each Group Company which it isnormal or prudent to have maintained by independent or specialist contractors, and (ii) inrespect of all assets which it is obliged to maintain or repair under any hire purchase,leasing, rental, insurance or other agreement, are in full force and effect.

13.

CORPORATE MATTERS

13.1.

Save as Disclosed in the Disclosure Letter, each Group Company is a limited liability
company duly incorporated under the laws of its jurisdiction of incorporation, has been incontinuous existence since incorporation, has all corporate powers required to carry on its
business as now conducted and is duly qualified to do business in each jurisdiction where
the nature of the properties owned or leased by it or the activities conducted by it makesuch qualification necessary.

13.2.

No Group Company has exercised any lien over any of its issued shares.

13.3.

Save as Disclosed in the Disclosure Letter, no Group Company reduced, repaid orpurchased any of its share capital, and there are no options or other agreements
K-22

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
outstanding which call for the issue of or accord to any person the right to call for the issueof any shares in the capital of the relevant Group Company or the right to require thecreation of any Encumbrance over any shares in its share capital.
13.4.

Save as Disclosed in the Disclosure Letter, except for the SPA, there is no option, right toacquire, mortgage, charge, pledge, lien or other form of security or Encumbrance on, overor affecting the shares or capital in, or any of the assets or businesses of, a Group
Company and there is no agreement or commitment to give or create any of the foregoing.

13.5.

Each Group Company has complied with its constitution (or the equivalent constitutive
documents) in all respects and none of the activities, agreements, commitments or rights
of a Group Company is ultra vires or unauthorised.

13.6.

Save as Disclosed in the Disclosure Letter, all governmental approvals, licences andauthorisations which were necessary or desirable in connection with the incorporation ofeach Group Company, the allotment or transfer of shares in each Group Company to thepresent and former holders thereof and the establishment of each Group Company(including the appointment of directors) were duly obtained.

13.7.

Save as Disclosed in the Audited Accounts or the Interim Accounts, no Group Company
is the legal or beneficial owner or holder of any share or has any interest of any description
in any other corporation and does not have any associated company (that is to say, acompany which falls to be treated as such for the purposes of the IFRS).

14.

COMPLIANCE WITH LAW, PERMITS AND LICENCES

14.1.

Save as Disclosed in the Disclosure Letter, each Group Company has carried on its
business in accordance with Applicable Laws, regulations and by-laws in its country ofincorporation or elsewhere and so far as the Warrantors are aware in any relevant country,
including all Applicable Laws relating to money laundering and gaming. There is no
investigation or enquiry by, or order, decree or judgment of, any court or any governmental
agency or regulatory body outstanding or anticipated against a Group Company which
may have an adverse effect upon their assets or business.

14.2.

Save as Disclosed in the Disclosure Letter, all statutory and other requirements applicableto the carrying on of the business of each Group Company as now carried on, and all terms
and conditions applicable to any licences, consents and certifications involved in the
carrying on of such business, have been complied with and the Warrantors are not awareof any breach thereof or of any intended or contemplated refusal or revocation of any suchlicence or consent.

14.3.

Save as Disclosed in the Disclosure Letter, each Group Company has obtained, and hascomplied with the terms and conditions of, each Permit.

14.4.

Save as Disclosed in the Disclosure Letter, each Permit is in force, unimpeachable andunconditional or subject only to a condition that has been satisfied. No expenditure or work
is or will be necessary to comply with, maintain or obtain a Permit, and no Permit will be
revoked, suspended, cancelled, varied or not renewed.

14.5.

Each action required for the renewal or extension of each Permit has been taken.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
14.6.

No Permit will be revoked, suspended, cancelled, varied or not renewed as a result of theexecution or performance of the SPA or any document to be executed at or before
Completion.

14.7.

Each Group Company is not a party to any agreement, arrangement or concerted practicenor is it carrying on any practice which in whole or in part contravenes or is invalidated byany anti-trust, fair trading, consumer protection or similar legislation in any jurisdiction
where such Group Company has assets or carries on business or in respect of which any
filing, registration or notification is required or is advisable pursuant to such legislation(whether or not the same has in fact been made).

15.

LITIGATION AND DISPUTES

15.1.

Save as Disclosed in the Disclosure Letter, no Group Company and no person for whose
acts or defaults a Group Company may be vicariously liable is involved, or has during thethree (3) years prior to the date of the SPA been involved, in a civil, criminal, arbitration,
administrative or other proceeding (other than as plaintiff in the collection of debts arisingin the ordinary course of its business).

15.2.

There are no fact or circumstance exists which might give rise to a civil, criminal,
arbitration, administrative or other proceeding involving a Group Company or a person forwhose acts or defaults a Group Company may be vicariously liable (other thaninvolvement as plaintiff in the collection of debts arising in the ordinary course of its
business).

15.3.

No Group Company nor any person for whose acts or defaults a Group Company may bevicariously liable has committed any criminal, illegal or other unlawful act or any breach ofcontract or statutory duty or any tortious or other act or default which could lead to a claim
or proceedings against a Group Company or give rise to or increase the liability or
obligation of a Group Company or which could entitle any other person to terminate any
contract to which a Group Company is a party.

15.4.

There is not in force any court injunction, order or directive restraining or restricting aGroup Company from carrying on its business or any part thereof or entering into or
performing the SPA.

15.5.

There is no outstanding judgment, order or decree of any court, tribunal or regulatory or
government body or any undertaking to any court, judicial authority or regulatory or
government body or any outstanding arbitration award against a Group Company, or aperson for whose acts or defaults a Group Company may be vicariously liable.

15.6.

There are no civil, criminal, administrative or disciplinary or arbitration proceedings inprogress, pending or threatened against a Group Company, or a person for whose acts ordefaults a Group Company may be vicariously liable and there are no facts likely to giverise to any such proceedings.

15.7.

There is not and has not been any governmental or other investigations, inquiries ordisciplinary proceedings by or before any regulatory, administrative, supervisory or
government body concerning a Group Company, whether on-going, pending or threatened
and no fact or circumstance exist which might give rise to any such investigation, inquiry
or proceedings.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
15.8.

No Group nor any person for whose acts or defaults a Group Company may be vicariously
liable has induced a person to enter into an agreement or arrangement with a Group
Company by means of an unlawful, corrupt or immoral payment, bribe, contribution, gift orother inducement or has given or offered or made an unlawful, corrupt or immoral
payment, bribe, contribution, gift or other inducement to a Government Official or
employee.

15.9.

No Group Company has been convicted of any offence. No officer, employee, agent orformer officer, agent or employee of a Group Company has been convicted of any offencesin relation to the Target Company or its Subsidiaries, and no employee has been convictedof any offence which reflects upon his suitability to hold his position or upon the reputationof a Group Company.

16.

INSOLVENCY

16.1.

Save as Disclosed in the Disclosure Letter, no order has been made or petition presented
or resolution passed for the winding-up or administration or for the appointment of aprovisional liquidator or judicial manager of a Group Company, nor are there any grounds
on which any person would be entitled to have a Group Company wound-up or placed inadministration or judicial management, nor has any person threatened to present such apetition or convened or threatened to convene a meeting of the members of a Group
Company to consider a resolution to wind up of such Group Company or any other
resolutions, nor has any step been taken in relation to a Group Company under the law
relating to insolvency or the relief of debtors in any part of the world.24

16.2.

No person has appointed or threatened to appoint or become entitled to appoint a receiveror receiver and manager or other similar officer of a Group Company’s business or assets
or any part of them.

16.3.

No composition in satisfaction of the debts of a Group Company, or scheme ofarrangement of its affairs, or compromise or arrangement between it and its creditors
and/or members or any class of its creditors and/or members, has been proposed,
sanctioned or approved.

16.4.

No Group Company has ceased business or operations nor stopped payment to its
creditors and there are no grounds on which a Group Company could be found to beunable to pay its debts.

16.5.

No distress, execution or other process has been levied on any asset owned or used by
a Group Company, nor has any person threatened any such distress, execution or otherprocess.

16.6.

There is no unsatisfied judgment, award, court order or decree of any court, tribunal,
arbitrator, mediator or regulatory or government body outstanding against a Group
Company.

16.7.

No event has occurred causing or which upon intervention or notice by any third party may
cause any floating charge created by a Group Company to crystallise or any charge

24

It was agreed between the Company and the Target Company that, as part of the Target Group’s internal restructuring
to streamline the group structure and improve operational efficiency, a number of entities that were within the Target
Group as of the date of the Sale and Purchase Agreement would be wound up, liquidated or otherwise dissolved
voluntarily as soon as practicable. Resolutions have been passed or will be passed to wind up, liquidate or dissolvethese entities.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
created by a Group Company to become enforceable, nor has any such crystallisation
occurred nor is such enforcement in process.
16.8.

In relation to any property or assets held by a Group Company under any hire purchase,
conditional sale, chattel leasing or retention of title agreement or otherwise belonging toa third party, no event has occurred which entitles, or which upon intervention or notice bya third party may entitle, the third party to repossess the property or assets concerned or
terminate the agreement or any licence in respect of the same.

17.

INTELLECTUAL PROPERTY

17.1.

The activities of each Group Company do not, nor have they in the three years prior to thedate of the SPA, infringed, misappropriated, misused, violated or otherwise made use
without authorisation of any third party Intellectual Property Rights nor has any person
threatened to issue such a notice.

17.2.

Save as Disclosed in the Disclosure Letter, no Group Company nor the Vendor hasreceived, in the three years prior to the date of the SPA, any notice from any person
alleging that the activities of a Group Company infringe, misappropriate, misuse or violate
or have infringed, misappropriated, misused, violated the Intellectual Property Rights of athird party or otherwise disputing the right of a Group Company to use any Intellectual
Property Rights.

17.3.

Each Group Company owns, or has a licence to use, all Intellectual Property Rights
necessary for each Group Company to operate its business as it has been operated prior
to the date of the SPA, and is not aware of any circumstance where any other Person has
breached its Intellectual Property Rights.

17.4.

The activities of each Group Company do not make unauthorised use of the confidential
information of any third party.

17.5.

The Business IP referred to in the SPA comprises all of the registered Intellectual Property
Rights of each Group Company.

17.6.

No employee, officer, director, consultant, agent or other representative of any Group
Company or other individual who has formerly held one of these positions has any right toclaim ownership or any other right in respect of Intellectual Property Rights used in thebusiness of a Group Company and all necessary assignments, settlements andcompromise agreements relating to the transfer or assignment of any of the Business IP
by any of the aforementioned individuals have been executed and are valid andenforceable.

18.

EMPLOYEES

18.1.

No Group Company has entered into any consultancy agreement under which services areprovided to any Group Company by an individual who is either a party to such a contract
or has a controlling interest in a legal entity which is a party to such a contract.

18.2.

Save as Disclosed in the Disclosure Letter, no Group Company has any bonus,
commission, profit sharing, share option, share incentive or other incentive schemes forany director, officer, worker or employee of the Target Company.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
18.3.

The basis of the remuneration payable to and benefits receivable by each Group
Company’s directors, other officers and employees is the same as at the Last Accounting
Date. In respect of any director, other officer or employee, the relevant Group Company
is not obliged to increase or vary from the current basis:(a)the non-cash benefits receivable such that the total annual cost of such benefits
would increase by more than one (1) per cent. per annum; or(b)

the salary, bonus or other remuneration such that the total annual payroll would
increase by more than one (1) per cent. per annum.

18.4.

No Group Company owes any amount to a current or former director, other officer or
employee, or consultant of such Group Company (or any of their dependents) other thanfor accrued salary, fees or reimbursement of business expenses for the month in which
Completion occurs.

18.5.

There is no legally enforceable agreement or arrangement between a Group Company
and a current or former employee or consultant (or any of their dependents) with respect
to his employment or his ceasing to be employed or engaged. The acquisition of the Sale
Shares by the Company or compliance with the terms of the SPA will not enable any
directors, officers or senior employees of each Group Company to terminate theiremployment or receive any payment or other benefit.

18.6.

Each Group Company has maintained all records required by law and good humanresources practice regarding the employment of each of its employees, and termination of
employment.

18.7.

No Group Company has outstanding any liability for breach or termination of any
employment contract or consultancy agreement or any breach of any statutory or
regulatory obligations relevant to the relations between it or its current or former directors,
employees, workers or consultants.

18.8.

Save as Disclosed in the Disclosure Letter, each Group Company has complied with eachobligation imposed on it by and each order and award made under statute, regulation,code of conduct, collective agreement, custom and practice, relevant to the relations
between it and its current or former employees, workers or consultants or a trade union orby the contracts with its employees or terms of engagement with its consultants.

18.9.

Save as Disclosed in the Disclosure Letter, no Group Company is involved in any active,
pending or threatened court, tribunal or arbitration proceedings in respect of any current
or former director, other office, employee, worker or consultant of the Target Company (orany of their dependants), and there are no facts or circumstances that could give rise tosuch proceedings.

18.10. Save as Disclosed in the Disclosure Letter, no employee of a Group Company is currently
subject to disciplinary or grievance proceedings.
18.11. No Group Company has entered into any agreement or arrangement with any trade union,
works council, staff association or other body representing any of its employees.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
18.12. No Group Company is involved in, has not received notice of, and no fact or circumstanceexists which might give rise to a dispute or negotiation with a trade union, works council,
staff association or other body representing any of its employees.
18.13. No liability has been or may be incurred by any Group Company for a material breach of
any obligation for contribution to a social security fund such as any pension fund,unemployment insurance, medical insurance, occupational injury insurance, maternity
insurance, housing fund or any other social security funds so provided under Applicable
Law to which a Group Company is obliged to make contributions to its employees. All suchcontributions have been paid to satisfy such obligations.
19.

DATA PRIVACY

19.1.

In connection with its collection, storage, transfer (including, without limitation, anytransfer across national borders) and/or use of any personally identifiable information fromany individuals, including, without limitation, any customers, prospective customers,
streamers, streamers’ agencies, employees and/or other third parties (collectively“Personal Data”), each Group Company is and has been in compliance with all Applicable
Laws in all relevant jurisdictions, the relevant Group Company’s privacy policies and therequirements of any contract or codes of conduct to which the relevant Group Company
is a party.

19.2.

Each Group Company has commercially reasonable physical, technical, organisational
and administrative security measures and policies in place to protect all Personal Data
collected by it or on its behalf from and against unauthorised access, use and/or
disclosure.

19.3.

Save as Disclosed in the Disclosure Letter, each Group Company is and has been incompliance in all respects with all laws relating to data loss, theft and breach of security
notification obligations.

20.

LEASES

20.1.

The Leases comprise all of the land and premises vested in, occupied or used by, or in thepossession, of, each Group Company. No Group Company owns any freehold or leaseholdproperty.

20.2.

There is no fact or circumstance which:

20.3.

(a)

could entitle or require a person (including a landlord or licensor) to forfeit or enter
on, or take possession of, or occupy, the relevant Lease;(b)

could restrict or terminate any Group Company’s continued and uninterrupted
possession or occupation of the relevant Lease; or(c)could prevent or restrict the relevant Lease’s development for which permission has
been or is expected to be obtained.

Except in relation to the Leases, no Group Company has any liability arising out of aconveyance, transfer, lease, tenancy, licence, agreement or other document relating toland, premises or an interest in land or premises.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
21.

INSURANCE

21.1.

Each Group Company has at all material times been and is at the date of the SPA
adequately insured against accident, damage, injury, third party loss and all other risks towhich a person operating the types of business operated by each Group Company is
exposed.

21.2.

The Policies comprise all of the insurance and indemnity policies in which a Group
Company is interested.

21.3.

Each of the Policies is valid and enforceable and is not void or voidable.

21.4.

Save as Disclosed in the Disclosure Letter, no Group Company has done anything oromitted to do anything which might make any of the Policies void or voidable, result in an
increase in the premium payable under any of the Policies, or prejudice the ability to effectinsurance on the same or better terms in the future.

21.5.

There is nothing which would make any of the Policies void or voidable, or prejudice theability to effect insurance on the same or better terms in the future.

21.6.

No insurer under any of the Policies has disputed, or given any indication that they intend
to dispute, the validity of any of the Policies on any groups.

21.7.

None of the Policies contains any provisions as to change of control or ownership of theinsured.

21.8.

No insurer has cancelled or refused to accept or continue any insurance in relation to a
Group Company.

21.9.

No claims have been made, no claim is outstanding and no fact or circumstance exists
which might give rise to a claim under any of the Policies.

21.10. No event, act or omission has occurred which requires notification under any of the
Policies.
21.11. Nothing has been done or omitted to be done which might entitle the insurers under anyof the Policies to refuse indemnity in whole or in part in respect of any claims under the
Policies.
21.12. All premiums which are due under the Policies have been paid.
22.

ENVIRONMENTAL MATTERS

22.1.

Each Group Company complies and has complied with all applicable environmental laws
and no Group Company has given or received any notification under any applicable
environmental law requiring it, or which is likely to result in a requirement for it, to take oromit to take any action.

22.2.

No works or other upgrading or expenditure other than as provided for in the Audited
Accounts is necessary or is planned or being carried out by a Group Company to securecompliance with applicable environmental laws.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
23.

EFFECT OF AGREEMENT

23.1.

No substantial supplier of a Group Company is likely to stop trading with the relevantGroup Company, reduce substantially its trading with the relevant Group Company orchange substantially the terms on which it is prepared to trade with the relevant Group
Company.

23.2.

The purchase of the Sale Shares by the Company by the Company and the performanceof the SPA will not:(a)cause a Group Company to lose the benefit of any right or privilege it presently
enjoys;(b)

save as Disclosed in the Disclosure Letter, relieve any person of any obligation to a
Group Company (whether contractual or otherwise) or enable any person todetermine any such obligation or any right or benefit enjoyed by a Group Company,or to exercise any right in respect of a Group Company; or(c)give rise to, or cause to become exercisable, any right of pre-emption over any
shares in a Group Company.

24.

SANCTIONS AND ANTI-CORRUPTION

24.1.

None of the Group Companies, nor, so far as the Warrantors are aware, any of the Group
Companies’ respective officers, directors, or employees, or any agents or other third-party
representatives acting on behalf of any Group Company, is currently, or has been: (i) aSanctioned Person; (ii) organised, ordinarily resident or located in a Sanctioned Country;(iii) knowingly engaging in any dealings or transactions with any Sanctioned Person or in
any Sanctioned Country in violation of Sanctions Laws; or (iv) otherwise in material
violation of applicable Trade Controls. The Group Companies and, so far as the
Warrantors are aware, each of the Group Companies’ respective officers, directors,
employees, agents, representatives or other persons acting on its behalf are incompliance, and have operated at all times in material compliance, with applicableanti-money laundering laws and regulations applicable to the Group Companies.

24.2.

None of the Group Companies, nor, so far as the Warrantors are aware, any of the Group
Companies’ respective officers, directors or employees, nor any agents or other third-party
representatives acting on behalf of any Group Company, has made any unlawful payment
or given, offered, promised, or authorised or agreed to give any money or anything ofvalue directly, or, so far as the Warrantors are aware, indirectly, to or from any “foreign
official” (as such term is defined in the U.S. Foreign Corrupt Practices Act), any
Government Official or other Person in material violation of any applicable Anti-Corruption
Laws or for the purpose of: (i) influencing any official act or decision of such Government
Official, party or candidate, (ii) inducing such Government Official, party or candidate touse his, her or its influence to affect any act or decision of a foreign Governmental
Authority, or (iii) securing any improper advantage, in the case of (i), (ii) and (iii) above inorder to assist any of the Group Companies or any of its affiliates in obtaining or retaining
business for or with, or directing business to, any person. None of the Group Companies
nor, so far as the Warrantors are aware, any of the Group Companies’ respective directors,
officers, employees or agents have made or authorised any bribe, kickback or otherunlawful payment of funds or received or retained any funds, in each case in violation of
any Applicable Law.
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
24.3.

In the past five years, none of the Group Companies has received from any Governmental
Authority any notice, inquiry, or internal or external allegation, or made any voluntary or
involuntary disclosure to a Governmental Authority, concerning any actual or potential
violation related to Trade Controls or Anti-Corruption Laws. Each Group Company has
maintained and enforced policies, procedures and internal controls (including, but notlimited to, accounting systems, purchasing systems and billing systems) reasonably
designed to ensure compliance with applicable Anti-Corruption Laws and Trade Controls.

24.4.

Each Group Company has maintained and currently maintains (i) books, records andaccounts which, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the Group Companies, and (ii) internal accounting controls
sufficient to provide reasonable assurances that all transactions and access to assets of
the Group Companies were, have been and are executed only in accordance withmanagement’s general or specific authorisation.

24.5.

So far as the Warrantors are aware, none of the Group Companies’ respective directors,
Representatives or other persons acting on their behalf is, or was during the past five
years, a Government Official.

Part B: Management Warrantor Warranties
1.

CAPACITY AND AUTHORITY

1.1.

The Vendor is a limited liability company incorporated under the laws of its jurisdiction ofincorporation, and has been in continuous existence since incorporation.

1.2.

The Vendor has full power and authority to enter into and perform the SPA and each of theTransaction Documents to which it is a party, and the SPA and each of the Transaction
Documents constitutes or will when executed, constitute binding obligations on the Vendor
in accordance with their terms.

1.3.

Upon the completion of the Restructuring, the Vendor has the right, power and authority
to transfer the Sale Shares, free from any lien, charge, equity, encumbrance, or third party
interest of any nature whatsoever and together with all rights of any nature attaching or
accruing to them.

1.4.

The Vendor has obtained all applicable governmental, statutory, regulatory or otherconsents, authorisations, approvals, licenses, waivers or exemptions required to empower
them to enter into and to perform its obligations under the SPA and the Transaction
Documents.

2.

THE SALE SHARES AND THE GROUP COMPANIES

2.1.

Upon the completion of the Restructuring, the Vendor will be the sole legal and beneficial
owner of the Sale Shares. The Sale Shares shall on Completion be properly and validly
transferred to the Company in accordance with Applicable Law and free from all
Encumbrances.

2.2.

Save as Disclosed in the Disclosure Letter, other than the SPA, there is no agreement,
arrangement or obligation requiring the creation, allotment, issue, transfer, redemption or
repayment of, or the grant to a person of the right to require the allotment, issue, transfer,redemption or payment of, any shares or other similar equity interest in the capital of any
Group Company (including an option or right of pre-emption or conversion).
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
2.3.

Save as Disclosed in the Disclosure Letter, other than as set out in the SPA, the Company
has no other Subsidiaries or associated companies, or interests in any other entity(whether incorporated or unincorporated).

3.

INFORMATION

3.1.

The corporate information and particulars in respect of each Group Company set out in the
SPA is true, accurate and not misleading.

3.2.

All information contained in any document or communication (whether oral or written)
which has been given or made available by or on behalf of the Vendor, the Target
Company or their respective Representatives to the Company or the Company’s
Representatives in the course of the negotiations leading to the SPA and due diligence
investigations carried out by or on behalf of the Company was so given or made available
in full and in good faith (and to the extent such information is required to be updated oramended in order to ensure that such information remains accurate as set forth below,
such amended or new information has been provided to the relevant parties) and was,when given (as amended or supplemented), and remains (as amended or supplemented),
true, complete and accurate in all respects and does not contain any untrue statement ofa material fact or omit to state a material fact necessary in order to make such information,in the light of the circumstances under which they were made not misleading whether
because of any omission or ambiguity or for any other reason. The Management
Warrantors are not aware of any fact or matter not Disclosed to the Company which
renders any such information untrue, inaccurate or misleading or the disclosure of whichmight affect the valuation of the Target Company or the willingness of the Company topurchase the Sale Shares from the Vendor, on the terms of the SPA or the price at or terms
upon which the Company would be willing to purchase the Sale Shares.

4.

SELLER CIRCULAR SECTIONS

4.1.

Each of the Vendor Circular Sections (as at the date of issuance to the Shareholders andthe Completion Date), the draft copy of the Vendor Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents as it
relates to the Group Companies (as at their respective dates of issuance) contains, andin the case of any amendment or supplement to the Circular as at the date of its issuanceto the Shareholders and the Completion Date will contain, all information that
Shareholders and their professional advisers would reasonably require and reasonably
expect to find there, or that is necessary to enable Shareholders and their advisers tomake a properly informed assessment of the merits and risks of the Proposed Business
Combination and the PIPE Financing, including, without limitation, the assets andliabilities, financial position, profits and losses and prospects of the Group Companies.

4.2.

Each of the Vendor Circular Sections (as at the date of issuance to the Shareholders andthe Completion Date), the draft copy of the Vendor Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents as it
relates to the Group Companies (as at their respective dates of issuance) does not, andwill not, and in the case of any amendment or supplement to the Circular as at the dateof its issuance to the Company’s Shareholders and the Completion Date does not, containany untrue statement of a material fact or omit to state any fact necessary to make thestatements therein, in the light of the circumstances under which they were made, notmisleading.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
4.3.

Each of the Vendor Circular Sections (as at the date of issuance to the Shareholders andthe Completion Date), the draft copy of the Vendor Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents (asat their respective dates of issuance) contains, and in the case of any amendment or
supplement to the Circular as at the date of its issuance to the Shareholders and theCompletion Date will contain, all particulars and information required by, and is incompliance with all applicable provisions of, the SFA, the Mainboard Rules and all otherrequirements of the SGX-ST and the MAS. The statements of intention, opinion, belief or
expectation contained in the Vendor Circular Sections (as at the date of issuance to the
Shareholders and the Completion Date), the draft copy of the Vendor Circular Sections (asat the date of submission to the SGX-ST for review), the PIPE Financing marketing
documents (as at their respective dates of issuance) and the SPA are, and in the case of
any amendment or supplement to the Circular at the date of its issuance to the
Shareholders and the Completion Date will be made after due, careful and properconsideration and, where appropriate, are based on assumptions referred to in each of the
Vendor Circular Sections (as at the date of issuance to the Shareholders and theCompletion Date), the draft copy of the Vendor Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents (asat their respective dates of issuance) and represent reasonable and fair expectations
based on all relevant facts known or which ought reasonably to have been known by the
Vendor and given in good faith after due and careful enquiry.

5.

CORPORATE RECORDS

5.1.

Save as Disclosed in the Disclosure Letter, the copies of the articles of association (or theequivalent constitutive documents) of each Group Company Disclosed to the Company or
its Representatives are true, accurate and complete in all respects and contain full detailsof the rights and restrictions attached to the share capital of each Group Company. Copiesof all the resolutions and agreements (including without limitation, shareholders’agreements, voting agreements, etc.) required to be annexed to or incorporated in thearticles of association (or the equivalent constitutive documents) of each Group Company
by the law applicable are annexed or incorporated and there have been no amendments
to such articles of association (or the equivalent constitutive documents) since the datehereof.

5.2.

Save as Disclosed in the Disclosure Letter, the statutory records, registers and books(including minute books) and the books of account of each Group Company have been
properly kept, are duly entered and maintained in accordance with all legal requirements
applicable thereto and contain true, full and accurate records of all matters required to be
dealt with therein and all such books and all records and documents (including documentsof title and copies of all subsisting agreements to which each Group Company is a party)
are its property, in its possession or under its control.

5.3.

No Group Company has received any notice of any application or intended application
under any applicable legislation for the rectification of its statutory records, registers
and/or books.

5.4.

Save as Disclosed in the Disclosure Letter, all returns, particulars, resolutions and otherdocuments which each Group Company is required by law to file with or deliver to any
authority in any jurisdiction have been correctly made up and filed or, as the case may be,delivered. In particular, all charges in favour of each Group Company have (if appropriate)
been registered in accordance with the provisions of any applicable legislation.
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
5.5.

No Group Company has given a power of attorney or other authority by which a person
may enter into an agreement, arrangement or obligation on the relevant Group Company’s
behalf (other than an authority for a director, other officer or employee to enter into anagreement in the usual course of that person’s duties).

6.

ACCOUNTS

6.1.

Save as Disclosed in the Audited Accounts and the Interim Accounts have been preparedin accordance with all Applicable Laws and the IFRS.

6.2.

The Audited Accounts have been audited by an auditor or firm of accountants qualified toact as auditors in the relevant jurisdictions and the auditors’ report(s) required to beannexed to the Audited Accounts is unqualified.

6.3.

Save as Disclosed in the Disclosure Letter, the Audited Accounts and the Interim Accounts
give a true and fair view of the state of affairs and the assets and liabilities of each Group
Company as at the date of the Audited Accounts and the Interim Accounts respectively andthe profits and losses, changes in equity and cash flows of each Group Company for the
relevant financial period.

6.4.

The Audited Accounts and the Interim Accounts make:

6.5.

6.6.

(a)

full provision for all actual liabilities;(b)

proper and adequate provision for (or note in accordance with good accountancy
practice) all contingent liabilities;(c)proper and adequate provision or reserve for all bad and doubtful debts; and(d)due provision for depreciation and amortisation and for any obsolescence of assets.

Full provision or reserve has been made in the Audited Accounts and the Interim Accounts
for all Taxation liable to be assessed on each Group Company or for which it is or may
become accountable in respect of:(a)profits, gains or income (as computed for Taxation purposes) arising or accruing or
deemed to arise or accrue on or before the date of the Audited Accounts and/or theInterim Accounts respectively;(b)

any transactions effected or deemed to be effected on or before the date of the
Audited Accounts and/or the Interim Accounts respectively or provided for in the
Audited Accounts and/or the Interim Accounts respectively;(c)

distributions made or deemed to be made on or before the date of the Audited
Accounts and/or the Interim Accounts respectively or provided for in the Audited
Accounts and/or the Interim Accounts respectively; and(d)deferred Taxation.

The profits and losses of the Target Company and its Subsidiaries for the financial year
ended on the Last Accounting Date as shown by the Audited Accounts and the Interim
Accounts and the trend of profits thereby shown have not (except as therein Disclosed)
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
been affected by inconsistencies of accounting practices, by the inclusion of unusual or
non-recurring items of income or expenditure, by transactions entered into otherwise thanon normal commercial terms or by any other factors rendering such profits for all or anyof such periods exceptionally high or low (other than as Disclosed in the relevant
accounts).
6.7.

The Interim Accounts have been prepared on a basis consistent with the Audited Accounts
without any changes in accounting policies used.

6.8.

The Interim Accounts have been prepared on a basis consistent with the Audited Accounts
and there has been no revaluation of any assets, fixed or otherwise, from the value of
those assets stated in the Audited Accounts.

7.

TRANSACTIONS AFFECTING THE AUDITED ACCOUNTS AND INTERIM ACCOUNTS

7.1.

No Group Company has any outstanding loan capital, and none of them have factored anyof their debts, or engaged in financing of a type which would not be required to be shownor reflected in the Audited Accounts and the Interim Accounts or borrowed any money
which has not repaid, save as Disclosed in the relevant accounts.

7.2.

There are no liabilities (including contingent liabilities) which are outstanding on the partof any of the Group Companies, other than those liabilities Disclosed in the Audited
Accounts and the Interim Accounts or which have arisen in the ordinary course of businesssince the date of the Audited Accounts and the Interim Accounts respectively.

7.3.

No transaction of any importance to which a Group Company has been party has takenplace which, if it had taken place on or before the date of the Audited Accounts or theInterim Accounts, would have been required to be Disclosed or reflected in the Audited
Accounts or the Interim Accounts, as the case may be.

7.4.

Revenue costs of an occasional or seasonal nature (including any holiday pay, closure andredundancy costs of fixed-term projects or contracts, bonuses, customer rebates, excess
use charges under leasing agreements and maintenance, repairs and renewals) were
accrued so as to match them as closely as possible to the related income and provided in
the Audited Accounts and the Interim Accounts to the extent of the accrual as at the dateof the Audited Accounts and the Interim Accounts respectively.

7.5.

No value was attributed in the Audited Accounts and the Interim Accounts to any asset
which was not beneficially owned by a Group Company at the date of the Audited Accounts
or the Interim Accounts, as the case may be, or which in the case of fixed assets, were notin full and exclusive use for the purposes of the relevant Group Company’s business.

8.

CHANGES SINCE THE AUDITED ACCOUNTS DATE

8.1.

Since the Last Accounting Date as regards each Group Company:(a)its business has been lawfully carried on in the ordinary course and so as to maintainthe same as a going concern;

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA(b)save as Disclosed in the Disclosure Letter, it has not acquired or disposed of any
assets or assumed or incurred any liabilities (including contingent liabilities) or
agreed to do any of the foregoing otherwise than in the ordinary course of carrying
on its business;(c)

its business has not been adversely affected by the loss of any important customer,
streamer, streamer’s agency or source of supply or by any abnormal factor notaffecting similar businesses to a like extent or by any other cause and theManagement Warrantors are not aware of any facts which are likely to give rise to
any such effects;(d)no dividend or other distribution has been, or agreed to be, declared, made or paid
to its members except as provided for in the Audited Accounts;(e)neither its turnover, trading position nor net profit before tax has deteriorated;(f)no change has been made in the emoluments or other terms of employment of its
directors or any of its employees;(g)it has not borrowed any money or issued any guarantee or created any Encumbrance
over any asset other than as Disclosed in the Audited Accounts;(h)no share or loan capital has been allotted, issued, repaid or redeemed and noagreement or arrangement has been made to do any of the foregoing;(i)there has been no unusual change in the number of monthly active streamers,
monthly active users and paying users;(j)

it has not entered into any unusual, long term or onerous commitments or contracts;(k)save as Disclosed in the Disclosure Letter, after making due and careful enquiries,
it has not learnt of any circumstance making bad or doubtful any of its book debts;(l)it has not entered into either a lease of or a license to assign any of its Property orat any time assigned or otherwise disposed of all or any part of the its Property
otherwise than in the ordinary course of carrying on its business;(m) it has not made or agreed to make any payment other than routine payments in theordinary and usual course of trading;(n)it has not by reason of any default by it or any other person in any of its obligations
become bound or liable to be called upon to repay prematurely any loan capital or
borrowed moneys or other forms of indebtedness or pay under any guarantee,
indemnity or other forms of liability;(o)it has not released any debtor on terms that the debtor pays less than the book valueof its debt and no debt owing to it has been deferred, subordinated or written off or
has proved to any extent irrecoverable;(p)there has been no Material Adverse Change and no event, fact or matter has
occurred or is likely to occur which will or is likely to give rise to any such change;(q)there has been no Material Adverse Change in its working capital requirements;
K-36

APPENDIX K: TERMS AND CONDITIONS OF THE SPA(r)

it has not knowingly waived or released any proprietary rights howsoever arising;(s)

it has not acquired or disposed of or granted any right or option or created any otherEncumbrance, save for those created pursuant to the SPA;(t)

no resolution has been passed and nothing has been done in the conduct ormanagement of the affairs of the Group Company which would be likely to reduce thenet asset value of the Group Company;(u)no change has been made to the accounting practices adopted in relation to theGroup Company and the accounting practices adopted for the Group Company are
consistent with those adopted in the Audited Accounts;(v)

it has not changed its accounting reference period; and(w) no claim sounding in damages has been made against the Group Company.
9.

TAXATION

9.1.

Each Group Company is and has at all times been resident only in its country ofincorporation for all Taxation purposes. To the best of the Management Warrantors’knowledge, no Group Company has been determined by the relevant Taxation Authority as
having established a permanent establishment or other place of business in any
jurisdiction other than its country of incorporation. In particular, no determination has been
made by the Japanese Taxation Authority that Ichi Nana Inc. has established a permanentestablishment in Japan for tax purposes and Ichi Nana Inc. has not been required to beregistered as a foreign company in Japan.

9.2.

Save as Disclosed in the Disclosure Letter, without prejudice to any other provision of the
SPA, there is no liability to Taxation in respect of, as a result of or in consequence of any
claim for Taxation which has been made or may hereafter be made:(a)in respect of or arising from any transaction effected or deemed to have beeneffected on or before Completion; or(b)by reference to any income, profits or gains earned, accrued or received on or before
Completion,

except:(i)to the extent that provision or reserve specifically in respect thereof was made in the
Audited Accounts or the Interim Accounts;(ii)

in respect of Taxation attributable to transactions arising out of the ordinary courseof the normal business of a Group Company; and(iii) to the extent that such claim arises as a result only of any provision or reserve inrespect thereof being insufficient by reason of any increase in rates of Taxation madeafter the date hereof with retrospective effect,
and there are no circumstances likely to give rise to such a liability.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
9.3.

There are no outstanding Tax liabilities in respect of the M17 Services Vietnam Co., Ltd.,
17 Service Holding Co., Ltd. and M17 Services (Thailand) Co., Ltd..

9.4.

No Group Company is or will become, liable to pay, or make reimbursement or indemnity
in respect of, any Taxation (or amounts corresponding thereto) as a consequence of the
failure by any other person to discharge that Taxation within any specified period orotherwise, where such Taxation relates to a profit, income or gain, transaction, event,omission or circumstance arising, occurring or deemed to arise or occur (whether whollyor partly) prior to Completion.

9.5.

Save as Disclosed in the Disclosure Letter, no relief (whether by way of deduction,
reduction, set-off, exemption, postponement, roll-over, repayment or allowance orotherwise) from, against or in respect of any Taxation has been claimed and/or given to a
Group Company which could or might be effectively withdrawn, postponed, restricted,
clawed back or otherwise lost as a result of any act, omission, event or circumstancearising or occurring prior to or on Completion. In particular:(a)the unutilised tax losses amounting to US$33.5 million of Ichi Nana Inc. Taiwan
Branch has not been recognised as deferred tax losses in the Audited Accounts dueto the potential forfeiture of the same;(b)

the unutilised tax losses amounting to US$5.1 million of NETW has not beenrecognised as deferred tax losses in the Audited Accounts due to the potential
forfeiture of the same upon the winding up, deregistration or dissolution of Next
Entertainment Limited Taiwan Branch;(c)the unutilised tax losses amounting to US$3.4 million of Wave has not beenrecognised as deferred tax losses in the Audited Accounts due to the potential
forfeiture of the same;(d)the unutilised tax losses amounting to US$5.5 million of 17LIVE HK has not beenrecognised as deferred tax losses in the Audited Accounts due to the potential
forfeiture of the same; and(e)

Liontrek is not subject to any potential disallowance of the tax losses amounting to
US$225,000 utilised by it.

9.6.

Save as Disclosed in the Disclosure Letter, all returns, accounts, computations, notices
and information which are or have been required to be made, given or delivered by aGroup Company for any Taxation purpose (i) have been made, given or delivered within
the requisite periods or within permitted extensions of such periods, (ii) are up-to-date,complete and accurate and made on a proper basis, and (iii) none of them is, or is likely
to be, the subject of any dispute with the Taxation Authority and the Tax returns will notgive rise to any assessment, adjustment or set-off (including any claim for interest on
unpaid Tax) by the relevant Taxation Authority. In particular, Ichi Nana Inc. Taiwan Branch
has settled the additional corporate income tax payable for FY2016 to FY2020 with the
Taiwan tax authority.

9.7.

No transaction has been effected since the Last Accounting Date by a Group Company inrespect of which any consent or clearance from the Taxation Authority was or will be
required or was or could have been sought (i) without such consent or clearance having
been validly obtained before the transaction was effected, (ii) otherwise than in
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
accordance with the terms of and so as to satisfy any conditions attached to such consent
or clearance, and (iii) otherwise than at a time when and in circumstances in which suchconsent or clearance was and will be valid and effective.
9.8.

All particulars furnished to the Taxation Authority in connection with any application forconsent or clearance by a Group Company since the Last Accounting Date fully andaccurately disclosed all facts and circumstances material to the decision of the Taxation
Authority.

9.9.

There are no circumstances that have arisen since the making of any application for any
such consent or clearance which might reasonably be expected to cause such consent orclearance to be or become invalid or to be withdrawn by the Taxation Authority.

9.10.

No Group Company has since the Last Accounting Date taken any action which has had,or will have, the result of altering, prejudicing or in any way disturbing any arrangement oragreement between a Group Company and the Taxation Authority.

9.11.

All Taxes assessed or imposed by any government or governmental or statutory bodywhich have been or will be assessed upon a Group Company in relation to periods on or
before Completion have been or will be paid on or before the relevant due date forpayment.

9.12.

Save as Disclosed in the Disclosure Letter, there is no further liability or contingent liability
for Taxation otherwise than as a result of operating activities in the ordinary course of aGroup Company’s business since the Last Accounting Date. No Group Company hasreceived any notice, inquiry, or internal or external allegation from Taiwan Taxation
Authority in respect of the transfer of know-how from Ichi Nana Inc. Taiwan Branch to
17LIVE Services Inc. in September 2021 (the “Spin-off”). To the best of the Management
Warrantors’ knowledge, any potential corporate income tax and value-added tax liability
on 17LIVE Taiwan (in its capacity as the successor entity of Ichi Nana Inc. Taiwan Branch)in respect of the Spin-off would not result in a Material Adverse Change.

9.13.

Each Group Company has made all deductions and withholdings in respect or on accountof Taxation which it is required or entitled by any relevant legislation to make from any
payments made by it including, but not limited to, interest, annuities or other annual
payments, royalties, rent, remuneration, payments to employees or sub-contractors or
payments to a non-resident and each has accounted in full to the relevant Taxation
Authority for any Taxation so deducted or withheld. In particular:(a)the intercompany service fees payable by Ichi Nana Inc. Taiwan Branch and Wave to
17LIVE HK and 17LIVE Japan (in respect of which potential withholding tax
obligations or liability of up to US$1,388,000 may be incurred) are classified under
Civil Law No. 125 with a 15-years request period;(b)

there are no potential withholding tax obligations or liability on Ichi Nana Inc. Taiwan
Branch, 17LIVE Services Inc. and Wave for intercompany service fees payable to
17LIVE Japan; and(c)there are no potential withholding tax obligations or liability on NETW forintercompany payables.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
9.14.

Proper records have been maintained in respect of all such deductions and withholdings
and all regulations applicable thereto have been complied with.

9.15.

No Group Company owns, or has agreed to acquire, any asset, and no Group Company
has received or agreed to receive any services or facilities (including without limitation, thebenefit of any licences or agreements), the consideration for the acquisition or provisionof which was or will be in excess of its market value, or otherwise than on an arm’s length
basis.

9.16.

No Group Company has disposed, or agreed to dispose, of any assets, and has notprovided or agreed to provide any services or facilities (including without limitation, thebenefit of any licences) which was or will be less than its market value, or otherwise thanon an arm’s length basis.

9.17.

No asset owned by a Group Company has at any time since its acquisition been subject
to a reduction in value such that any allowable loss arising on its disposal is likely to be
reduced or eliminated or any chargeable gain arising on its disposal is likely to be
increased.

9.18.

No Group Company nor any of its directors or officers has paid, or become liable to pay,
any fine, penalty or interest charged by virtue of any statutory provision relating toTaxation.

9.19.

No Group Company has since the Last Accounting Date engaged in, been a party to, or
been otherwise involved in any transaction or series of transactions or scheme orarrangement of which the main purpose, or one of the main purposes, was or may beperceived to be the evasion of or avoidance of, or deferral of or a reduction in the liability
to, Taxation, in contravention of any applicable laws.

9.20.

Save as Disclosed in the Disclosure Letter, no Group Company been the subject of aninvestigation, discovery or access order by or involving any Taxation Authority and there
are no circumstances existing which make it likely that an investigation, discovery or order
will be made.

9.21.

Save as Disclosed in the Disclosure Letter, each Group Company is in compliance with allapplicable transfer pricing laws and regulations, including the execution and maintenanceof contemporaneous documentation substantiating its transfer pricing practices andmethodology. The prices for any intercompany loans and balances, good or service
provided by or to each Group Company are at arm’s length price for the purposes of all
applicable transfer pricing laws.

9.22.

In relation to stamp duty assessable or payable in the jurisdictions where any Group
Company carries out its business, save for the documents in respect of the transactions
contemplated under the SPA which are subject to stamp duty, all documents of which theenforcement each Group Company may, in such Group Company’s opinion, be reasonablyinterested in have been duly stamped.

9.23.

17LIVE SEA has completed Singapore goods and services tax (“GST”) registration andthere is no Singapore GST due and payable by 17LIVE SEA as of the date of the SPA.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
10.

DEBTS TO, AND CONTRACTS WITH, CONNECTED PERSONS

10.1.

Save as Disclosed in the Audited Accounts or the Interim Accounts, there are:(a)no loans or quasi-loans made by a Group Company to, and no debts (whether or notdue for payment and including contingent liabilities) other than debts which havearisen in the ordinary course of business or unfulfilled obligations (present or future,
actual or contingent) owing by the Target Company to any director, officer, employee
or shareholder of a Group Company or any person connected to any of them;(b)no credit transactions by a Group Company acting as creditor for the benefit of any
director, officer, employee or shareholder of a Group Company or any person
connected to any of them,(c)no debts owing by a Group Company other than debts which have arisen in theordinary course of business;(d)no securities given by or to a Group Company (including guarantees or indemnities)
for any such loans, quasi-loans, credit transactions or debts as aforesaid; and(e)no claim or circumstance which may give rise to a claim against a Group Company
by any director, officer, employee or shareholder of a Group Company or any person
connected to any of them.

10.2.

There is no contract, arrangement or understanding to which a Group Company is a party
or by which it is bound which is not on entirely arm’s length terms.

10.3.

Save as Disclosed in the Audited Accounts or the Interim Accounts, none of the book debts
which are included in the Audited Accounts or the Interim Accounts or which have arisen
after the Last Accounting Date have been outstanding for more than three months fromtheir due dates for payment and each such debt has realised or will realise in the normal
course of collection its full value as included in the Audited Accounts or the Interim
Accounts or in the books of a Group Company after taking into account any provision forsuch debt made in the Audited Accounts or the Interim Accounts.

10.4.

The share repurchase agreement between Li-Tchen Huang and the Target Company dated
10 November 2020 has been terminated and the parties thereto have entered into a deedof release dated 5 September 2023 to the effect that are no further claims against theGroup Companies for any payments, claims, outstandings or liability whatsoever.

11.

INDEBTEDNESS AND WORKING CAPITAL

11.1.

Save as Disclosed in the Disclosure Letter, and the Audited Accounts or the Interim
Accounts, no Group Company has outstanding, and no Group Company has agreed tocreate or incur, loan capital, borrowings or indebtedness in the nature of borrowings.

11.2.

The total borrowings of any member of the Group does not exceed any limitations on suchmember’s borrowing powers contained in the constitution (or the equivalent constitutive
documents) of the relevant member of the Group or in any debenture or other deed or
document binding on such member.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
11.3.

Save as Disclosed in the Disclosure Letter, no Group Company is a party to any loan
agreement, facility letter or other agreement for the provision of credit or financing
facilities to it or any agreement for the sale, factoring or discounting of debts.

11.4.

No Group Company engaged in any borrowing or financing transaction or arrangement
which does not appear as borrowings in the Audited Accounts.

11.5.

No Group Company has lent any money that has not been repaid and there are no debts
owing to a Group Company other than debts that have arisen in the normal course ofbusiness.

11.6.

The debts owing to each Group Company shown in the Audited Accounts and the Interim
Accounts were paid in full on the date they became due (except for any provision for bador doubtful debts made in the Audited Accounts and the Interim Accounts).

11.7.

All other debts owing to a Group Company are or will be recoverable in full as and when
they fall due.

11.8.

Each Group Company shall be free of any debt or liability of any nature whatsoever(whether actual, contingent or otherwise) as at the Completion Date (other than debts thathave arisen in the normal course of business).

11.9.

No Group Company given or entered into or undertaken to give or enter into any
guarantee, Encumbrances or other security agreement or arrangement for the liability,
borrowings or other obligations of any person and no Group Company is responsible forthe indebtedness or the default in performance of any person.

11.10. Save as Disclosed in the Disclosure Letter, no event has occurred or been alleged to haveoccurred and no circumstances have arisen which:(a)constitutes an event of default as defined under a loan agreement, facility letter orother agreement for the provision of credit or financing facilities, or otherwise gives
rise to an obligation to repay (prematurely or otherwise), under an agreement relating
to borrowing or indebtedness in the nature of borrowing (or will do so with the givingof notice or lapse of time or both);(b)will lead to an Encumbrance constituted or created in connection with borrowing or
indebtedness in the nature of borrowing, a guarantee, an indemnity, or otherobligation of a Group Company becoming enforceable (or will do so with the givingof notice or lapse of time or both);(c)would entitle a provider of finance to a Group Company (other than on a normal
overdraft facility) to call in the whole or any part of the monies advanced or to enforce
its security (or will do so with the giving of notice or lapse of time or both); or(d)would entitle a provider of finance to a Group Company to withdraw, reduce or not
renew any existing facilities to a Group Company or alter any terms thereof to a
Group Company’s disadvantage.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
11.11. The change in the shareholdings of the Target Company upon Completion will not:(a)result in the termination of or materially affect any financial agreement or
arrangement to which a Group Company is a party or subject; or(b)result in any indebtedness of a Group Company becoming due, or capable of being
declared due and payable, prior to its stated maturity.

11.12. The Target Company has sufficient working capital available to meet its ongoing working
capital requirements.
11.13. Having regard to the existing working capital available to it, each Group Company has
sufficient working capital for the purposes of:(a)continuing to carry on its business in its present form and at its present level ofturnover; and(b)executing, carrying out and fulfilling in accordance with their respective terms allorders, projects and contractual obligations which have been placed with orundertaken by such member.

12.

ASSETS

12.1.

All assets (including all intangible assets) owned, held or used by and all debts due toeach Group Company which are included in the Audited Accounts or the Interim Accounts
or have otherwise been represented as being the property of and due to a Group
Company:(a)are legally and beneficially owned by it free from any Encumbrance; and(b)

are in its possession or under its exclusive control.

12.2.

There is no Encumbrance on, over or affecting the whole or any part of the undertaking,assets or debts of a Group Company (including, where appropriate, its investment in its
Subsidiaries or associated companies) and there is no agreement or commitment to giveor create any Encumbrance and no claim has been made by any person to be entitled toany Encumbrance.

12.3.

Each Group Company has good and marketable title to all the assets owned by it.

12.4.

The assets owned by each Group Company comprise all the assets necessary to enable
the relevant Group Company to carry on its business fully and effectively in the ordinary
course as carried on up to and as at the date of the SPA and no such assets are usedwholly or partly for any purpose other than the Group’s business.

12.5.

All assets owned or used by a Group Company which are subject to a requirement oflicensing or registration of ownership, possession or use are duly licensed or registered inits sole name.

12.6.

All plant, machinery, equipment and vehicles owned or used by each Group Company arein good and safe repair and condition having regard to their respective age, have been
regularly and properly maintained, are suitable for the purposes of which they are used
and intended and are in working order, and none is in a dangerous or (in the case ofvehicles) unroadworthy condition or in need of renewal or replacement.
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
12.7.

All maintenance contracts (i) in respect of assets of each Group Company which it isnormal or prudent to have maintained by independent or specialist contractors, and (ii) inrespect of all assets which it is obliged to maintain or repair under any hire purchase,leasing, rental, insurance or other agreement, are in full force and effect.

13.

CORPORATE MATTERS

13.1.

Save as Disclosed in the Disclosure Letter, each Group Company is a limited liability
company duly incorporated under the laws of its jurisdiction of incorporation, has been incontinuous existence since incorporation, has all corporate powers required to carry on its
business as now conducted and is duly qualified to do business in each jurisdiction where
the nature of the properties owned or leased by it or the activities conducted by it makesuch qualification necessary.

13.2.

No Group Company has exercised any lien over any of its issued shares.

13.3.

Save as Disclosed in the Disclosure Letter, no Group Company reduced, repaid orpurchased any of its share capital, and there are no options or other agreements
outstanding which call for the issue of or accord to any person the right to call for the issueof any shares in the capital of the relevant Group Company or the right to require thecreation of any Encumbrance over any shares in its share capital.

13.4.

Save as Disclosed in the Disclosure Letter, except for the SPA, there is no option, right toacquire, mortgage, charge, pledge, lien or other form of security or Encumbrance on, overor affecting the shares or capital in, or any of the assets or businesses of, a Group
Company and there is no agreement or commitment to give or create any of the foregoing.

13.5.

Each Group Company has complied with its constitution (or the equivalent constitutive
documents) in all respects and none of the activities, agreements, commitments or rights
of a Group Company is ultra vires or unauthorised.

13.6.

Save as Disclosed in the Disclosure Letter, all governmental approvals, licences andauthorisations which were necessary or desirable in connection with the incorporation ofeach Group Company, the allotment or transfer of shares in each Group Company to thepresent and former holders thereof and the establishment of each Group Company(including the appointment of directors) were duly obtained.

13.7.

Save as Disclosed in the Audited Accounts or the Interim Accounts, no Group Company
is the legal or beneficial owner or holder of any share or has any interest of any description
in any other corporation and does not have any associated company (that is to say, acompany which falls to be treated as such for the purposes of the IFRS).

14.

COMPLIANCE WITH LAW, PERMITS AND LICENCES

14.1.

Save as Disclosed in the Disclosure Letter, each Group Company has carried on its
business in accordance with Applicable Laws, regulations and by-laws in its country ofincorporation or elsewhere and so far as the Management Warrantors are aware in any
relevant country, including all Applicable Laws relating to money laundering and gaming.
There is no investigation or enquiry by, or order, decree or judgment of, any court or any
governmental agency or regulatory body outstanding or anticipated against a Group
Company which may have an adverse effect upon their assets or business.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
14.2.

Save as Disclosed in the Disclosure Letter, all statutory and other requirements applicableto the carrying on of the business of each Group Company as now carried on, and all terms
and conditions applicable to any licences, consents and certifications involved in the
carrying on of such business, have been complied with and the Management Warrantors
are not aware of any breach thereof or of any intended or contemplated refusal or
revocation of any such licence or consent.

14.3.

Save as Disclosed in the Disclosure Letter, each Group Company has obtained, and hascomplied with the terms and conditions of, each Permit.

14.4.

Save as Disclosed in the Disclosure Letter, each Permit is in force, unimpeachable andunconditional or subject only to a condition that has been satisfied. No expenditure or work
is or will be necessary to comply with, maintain or obtain a Permit, and no Permit will be
revoked, suspended, cancelled, varied or not renewed.

14.5.

Each action required for the renewal or extension of each Permit has been taken.

14.6.

No Permit will be revoked, suspended, cancelled, varied or not renewed as a result of theexecution or performance of the SPA or any document to be executed at or before
Completion.

14.7.

Each Group Company is not a party to any agreement, arrangement or concerted practicenor is it carrying on any practice which in whole or in part contravenes or is invalidated byany anti-trust, fair trading, consumer protection or similar legislation in any jurisdiction
where such Group Company has assets or carries on business or in respect of which any
filing, registration or notification is required or is advisable pursuant to such legislation(whether or not the same has in fact been made).

15.

LITIGATION AND DISPUTES

15.1.

Save as Disclosed in the Disclosure Letter, no Group Company and no person for whose
acts or defaults a Group Company may be vicariously liable is involved, or has during thethree (3) years prior to the date of the SPA been involved, in a civil, criminal, arbitration,
administrative or other proceeding (other than as plaintiff in the collection of debts arisingin the ordinary course of its business).

15.2.

There are no fact or circumstance exists which might give rise to a civil, criminal,
arbitration, administrative or other proceeding involving a Group Company or a person forwhose acts or defaults a Group Company may be vicariously liable (other thaninvolvement as plaintiff in the collection of debts arising in the ordinary course of its
business).

15.3.

No Group Company nor any person for whose acts or defaults a Group Company may bevicariously liable has committed any criminal, illegal or other unlawful act or any breach ofcontract or statutory duty or any tortious or other act or default which could lead to a claim
or proceedings against a Group Company or give rise to or increase the liability or
obligation of a Group Company or which could entitle any other person to terminate any
contract to which a Group Company is a party.

15.4.

There is not in force any court injunction, order or directive restraining or restricting aGroup Company from carrying on its business or any part thereof or entering into or
performing the SPA.
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
15.5.

There is no outstanding judgment, order or decree of any court, tribunal or regulatory or
government body or any undertaking to any court, judicial authority or regulatory or
government body or any outstanding arbitration award against a Group Company, or aperson for whose acts or defaults a Group Company may be vicariously liable.

15.6.

There are no civil, criminal, administrative or disciplinary or arbitration proceedings inprogress, pending or threatened against a Group Company, or a person for whose acts ordefaults a Group Company may be vicariously liable and there are no facts likely to giverise to any such proceedings.

15.7.

There is not and has not been any governmental or other investigations, inquiries ordisciplinary proceedings by or before any regulatory, administrative, supervisory or
government body concerning a Group Company, whether on-going, pending or threatened
and no fact or circumstance exist which might give rise to any such investigation, inquiry
or proceedings.

15.8.

No Group nor any person for whose acts or defaults a Group Company may be vicariously
liable has induced a person to enter into an agreement or arrangement with a Group
Company by means of an unlawful, corrupt or immoral payment, bribe, contribution, gift orother inducement or has given or offered or made an unlawful, corrupt or immoral
payment, bribe, contribution, gift or other inducement to a Government Official or
employee.

15.9.

No Group Company has been convicted of any offence. No officer, employee, agent orformer officer, agent or employee of a Group Company has been convicted of any offencesin relation to the Target Company or its Subsidiaries, and no employee has been convictedof any offence which reflects upon his suitability to hold his position or upon the reputationof a Group Company.

16.

INSOLVENCY

16.1.

Save as Disclosed in the Disclosure Letter, no order has been made or petition presented
or resolution passed for the winding-up or administration or for the appointment of aprovisional liquidator or judicial manager of a Group Company, nor are there any grounds
on which any person would be entitled to have a Group Company wound-up or placed inadministration or judicial management, nor has any person threatened to present such apetition or convened or threatened to convene a meeting of the members of a Group
Company to consider a resolution to wind up of such Group Company or any other
resolutions, nor has any step been taken in relation to a Group Company under the law
relating to insolvency or the relief of debtors in any part of the world.

16.2.

No person has appointed or threatened to appoint or become entitled to appoint a receiveror receiver and manager or other similar officer of a Group Company’s business or assets
or any part of them.

16.3.

No composition in satisfaction of the debts of a Group Company, or scheme ofarrangement of its affairs, or compromise or arrangement between it and its creditors
and/or members or any class of its creditors and/or members, has been proposed,
sanctioned or approved.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
16.4.

No Group Company has ceased business or operations nor stopped payment to its
creditors and there are no grounds on which a Group Company could be found to beunable to pay its debts.

16.5.

No distress, execution or other process has been levied on any asset owned or used by
a Group Company, nor has any person threatened any such distress, execution or otherprocess.

16.6.

There is no unsatisfied judgment, award, court order or decree of any court, tribunal,
arbitrator, mediator or regulatory or government body outstanding against a Group
Company.

16.7.

No event has occurred causing or which upon intervention or notice by any third party may
cause any floating charge created by a Group Company to crystallise or any charge
created by a Group Company to become enforceable, nor has any such crystallisation
occurred nor is such enforcement in process.

16.8.

In relation to any property or assets held by a Group Company under any hire purchase,
conditional sale, chattel leasing or retention of title agreement or otherwise belonging toa third party, no event has occurred which entitles, or which upon intervention or notice bya third party may entitle, the third party to repossess the property or assets concerned or
terminate the agreement or any licence in respect of the same.

17.

INTELLECTUAL PROPERTY

17.1.

The activities of each Group Company do not, nor have they in the three years prior to thedate of the SPA, infringed, misappropriated, misused, violated or otherwise made use
without authorisation of any third party Intellectual Property Rights nor has any person
threatened to issue such a notice.

17.2.

Save as Disclosed in the Disclosure Letter, no Group Company nor the Vendor hasreceived, in the three years prior to the date of the SPA, any notice from any person
alleging that the activities of a Group Company infringe, misappropriate, misuse or violate
or have infringed, misappropriated, misused, violated the Intellectual Property Rights of athird party or otherwise disputing the right of a Group Company to use any Intellectual
Property Rights.

17.3.

Each Group Company owns, or has a licence to use, all Intellectual Property Rights
necessary for each Group Company to operate its business as it has been operated prior
to the date of the SPA, and is not aware of any circumstance where any other Person has
breached its Intellectual Property Rights.

17.4.

The activities of each Group Company do not make unauthorised use of the confidential
information of any third party.

17.5.

The Business IP referred to in the SPA comprises all of the registered Intellectual Property
Rights of each Group Company.

17.6.

No employee, officer, director, consultant, agent or other representative of any Group
Company or other individual who has formerly held one of these positions has any right toclaim ownership or any other right in respect of Intellectual Property Rights used in thebusiness of a Group Company and all necessary assignments, settlements and

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
compromise agreements relating to the transfer or assignment of any of the Business IP
by any of the aforementioned individuals have been executed and are valid andenforceable.
18.

EMPLOYEES

18.1.

No Group Company has entered into any consultancy agreement under which services areprovided to any Group Company by an individual who is either a party to such a contract
or has a controlling interest in a legal entity which is a party to such a contract.

18.2.

Save as Disclosed in the Disclosure Letter, no Group Company has any bonus,
commission, profit sharing, share option, share incentive or other incentive schemes forany director, officer, worker or employee of the Target Company.

18.3.

The basis of the remuneration payable to and benefits receivable by each Group
Company’s directors, other officers and employees is the same as at the Last Accounting
Date. In respect of any director, other officer or employee, the relevant Group Company
is not obliged to increase or vary from the current basis:(a)the non-cash benefits receivable such that the total annual cost of such benefits
would increase by more than one (1) per cent. per annum; or(b)

the salary, bonus or other remuneration such that the total annual payroll would
increase by more than one (1) per cent. per annum.

18.4.

No Group Company owes any amount to a current or former director, other officer or
employee, or consultant of such Group Company (or any of their dependents) other thanfor accrued salary, fees or reimbursement of business expenses for the month in which
Completion occurs.

18.5.

There is no legally enforceable agreement or arrangement between a Group Company
and a current or former employee or consultant (or any of their dependents) with respect
to his employment or his ceasing to be employed or engaged. The acquisition of the Sale
Shares by the Company or compliance with the terms of the SPA will not enable any
directors, officers or senior employees of each Group Company to terminate theiremployment or receive any payment or other benefit.

18.6.

Each Group Company has maintained all records required by law and good humanresources practice regarding the employment of each of its employees, and termination of
employment.

18.7.

No Group Company has outstanding any liability for breach or termination of any
employment contract or consultancy agreement or any breach of any statutory or
regulatory obligations relevant to the relations between it or its current or former directors,
employees, workers or consultants.

18.8.

Save as Disclosed in the Disclosure Letter, each Group Company has complied with eachobligation imposed on it by and each order and award made under statute, regulation,code of conduct, collective agreement, custom and practice, relevant to the relations
between it and its current or former employees, workers or consultants or a trade union orby the contracts with its employees or terms of engagement with its consultants.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
18.9.

Save as Disclosed in the Disclosure Letter, no Group Company is involved in any active,
pending or threatened court, tribunal or arbitration proceedings in respect of any current
or former director, other office, employee, worker or consultant of the Target Company (orany of their dependants), and there are no facts or circumstances that could give rise tosuch proceedings.

18.10. Save as Disclosed in the Disclosure Letter, no employee of a Group Company is currently
subject to disciplinary or grievance proceedings.
18.11. No Group Company has entered into any agreement or arrangement with any trade union,
works council, staff association or other body representing any of its employees.
18.12. No Group Company is involved in, has not received notice of, and no fact or circumstanceexists which might give rise to a dispute or negotiation with a trade union, works council,
staff association or other body representing any of its employees.
18.13. No liability has been or may be incurred by any Group Company for a material breach of
any obligation for contribution to a social security fund such as any pension fund,unemployment insurance, medical insurance, occupational injury insurance, maternity
insurance, housing fund or any other social security funds so provided under Applicable
Law to which a Group Company is obliged to make contributions to its employees. All suchcontributions have been paid to satisfy such obligations.
19.

DATA PRIVACY

19.1.

In connection with its collection, storage, transfer (including, without limitation, anytransfer across national borders) and/or use of any personally identifiable information fromany individuals, including, without limitation, any customers, prospective customers,
streamers, streamers’ agencies, employees and/or other third parties (collectively“Personal Data”), each Group Company is and has been in compliance with all Applicable
Laws in all relevant jurisdictions, the relevant Group Company’s privacy policies and therequirements of any contract or codes of conduct to which the relevant Group Company
is a party.

19.2.

Each Group Company has commercially reasonable physical, technical, organisational
and administrative security measures and policies in place to protect all Personal Data
collected by it or on its behalf from and against unauthorised access, use and/or
disclosure.

19.3.

Save as Disclosed in the Disclosure Letter, each Group Company is and has been incompliance in all respects with all laws relating to data loss, theft and breach of security
notification obligations.

20.

LEASES

20.1.

The Leases comprise all of the land and premises vested in, occupied or used by, or in thepossession, of, each Group Company. No Group Company owns any freehold or leaseholdproperty.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
20.2.

There is no fact or circumstance which:(a)could entitle or require a person (including a landlord or licensor) to forfeit or enter
on, or take possession of, or occupy, the relevant Lease;(b)

could restrict or terminate any Group Company’s continued and uninterrupted
possession or occupation of the relevant Lease; or(c)could prevent or restrict the relevant Lease’s development for which permission has
been or is expected to be obtained.

20.3.

Except in relation to the Leases, no Group Company has any liability arising out of aconveyance, transfer, lease, tenancy, licence, agreement or other document relating toland, premises or an interest in land or premises.

21.

INSURANCE

21.1.

Each Group Company has at all material times been and is at the date of the SPA
adequately insured against accident, damage, injury, third party loss and all other risks towhich a person operating the types of business operated by each Group Company is
exposed.

21.2.

The Policies comprise all of the insurance and indemnity policies in which a Group
Company is interested.

21.3.

Each of the Policies is valid and enforceable and is not void or voidable.

21.4.

Save as Disclosed in the Disclosure Letter, no Group Company has done anything oromitted to do anything which might make any of the Policies void or voidable, result in an
increase in the premium payable under any of the Policies, or prejudice the ability to effectinsurance on the same or better terms in the future.

21.5.

There is nothing which would make any of the Policies void or voidable, or prejudice theability to effect insurance on the same or better terms in the future.

21.6.

No insurer under any of the Policies has disputed, or given any indication that they intend
to dispute, the validity of any of the Policies on any groups.

21.7.

None of the Policies contains any provisions as to change of control or ownership of theinsured.

21.8.

No insurer has cancelled or refused to accept or continue any insurance in relation to a
Group Company.

21.9.

No claims have been made, no claim is outstanding and no fact or circumstance exists
which might give rise to a claim under any of the Policies.

21.10. No event, act or omission has occurred which requires notification under any of the
Policies.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
21.11. Nothing has been done or omitted to be done which might entitle the insurers under anyof the Policies to refuse indemnity in whole or in part in respect of any claims under the
Policies.
21.12. All premiums which are due under the Policies have been paid.
22.

ENVIRONMENTAL MATTERS

22.1.

Each Group Company complies and has complied with all applicable environmental laws
and no Group Company has given or received any notification under any applicable
environmental law requiring it, or which is likely to result in a requirement for it, to take oromit to take any action.

22.2.

No works or other upgrading or expenditure other than as provided for in the Audited
Accounts is necessary or is planned or being carried out by a Group Company to securecompliance with applicable environmental laws.

23.

EFFECT OF AGREEMENT

23.1.

No substantial supplier of a Group Company is likely to stop trading with the relevantGroup Company, reduce substantially its trading with the relevant Group Company orchange substantially the terms on which it is prepared to trade with the relevant Group
Company.

23.2.

The purchase of the Sale Shares by the Company by the Company and the performanceof the SPA will not:(a)cause a Group Company to lose the benefit of any right or privilege it presently
enjoys;(b)

save as Disclosed in the Disclosure Letter, relieve any person of any obligation to a
Group Company (whether contractual or otherwise) or enable any person todetermine any such obligation or any right or benefit enjoyed by a Group Company,or to exercise any right in respect of a Group Company; or(c)give rise to, or cause to become exercisable, any right of pre-emption over any
shares in a Group Company.

24.

SANCTIONS AND ANTI-CORRUPTION

24.1.

None of the Group Companies, nor, so far as the Management Warrantors are aware, anyof the Group Companies’ respective officers, directors, or employees, or any agents orother third-party representatives acting on behalf of any Group Company, is currently, or
has been: (i) a Sanctioned Person; (ii) organised, ordinarily resident or located in a
Sanctioned Country; (iii) knowingly engaging in any dealings or transactions with any
Sanctioned Person or in any Sanctioned Country in violation of Sanctions Laws; or(iv) otherwise in material violation of applicable Trade Controls. The Group Companies
and, so far as the Management Warrantors are aware, each of the Group Companies’
respective officers, directors, employees, agents, representatives or other persons acting
on its behalf are in compliance, and have operated at all times in material compliance, withapplicable anti-money laundering laws and regulations applicable to the Group
Companies.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
24.2.

None of the Group Companies, nor, so far as the Management Warrantors are aware, anyof the Group Companies’ respective officers, directors or employees, nor any agents orother third-party representatives acting on behalf of any Group Company, has made any
unlawful payment or given, offered, promised, or authorised or agreed to give any moneyor anything of value directly, or, so far as the Management Warrantors are aware,indirectly, to or from any “foreign official” (as such term is defined in the U.S. Foreign
Corrupt Practices Act), any Government Official or other Person in material violation of any
applicable Anti-Corruption Laws or for the purpose of: (i) influencing any official act ordecision of such Government Official, party or candidate, (ii) inducing such Government
Official, party or candidate to use his, her or its influence to affect any act or decision of
a foreign Governmental Authority, or (iii) securing any improper advantage, in the case of(i), (ii) and (iii) above in order to assist any of the Group Companies or any of its affiliates
in obtaining or retaining business for or with, or directing business to, any person. Noneof the Group Companies nor, so far as the Management Warrantors are aware, any of theGroup Companies’ respective directors, officers, employees or agents have made orauthorised any bribe, kickback or other unlawful payment of funds or received or retained
any funds, in each case in violation of any Applicable Law.

24.3.

In the past five years, none of the Group Companies has received from any Governmental
Authority any notice, inquiry, or internal or external allegation, or made any voluntary or
involuntary disclosure to a Governmental Authority, concerning any actual or potential
violation related to Trade Controls or Anti-Corruption Laws. Each Group Company has
maintained and enforced policies, procedures and internal controls (including, but notlimited to, accounting systems, purchasing systems and billing systems) reasonably
designed to ensure compliance with applicable Anti-Corruption Laws and Trade Controls.

24.4.

Each Group Company has maintained and currently maintains (i) books, records andaccounts which, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the Group Companies, and (ii) internal accounting controls
sufficient to provide reasonable assurances that all transactions and access to assets of
the Group Companies were, have been and are executed only in accordance withmanagement’s general or specific authorisation.

24.5.

So far as the Management Warrantors are aware, none of the Group Companies’
respective directors, Representatives or other persons acting on their behalf is, or was
during the past five years, a Government Official.

Part C: Founder Warranties
1.

The Founder is the legal and beneficial owner of 100% of the issued and paid-up sharecapital of Dragon Alexander Limited.

2.

Upon the completion of the Restructuring, Dragon Alexander Limited will be the sole legal
and beneficial owner of 27,005,565 shares in the share capital of the Vendor.

Part D: Company Warranties
1.

CORPORATE MATTERS; CAPITALISATION AND VOTING RIGHTS

1.1.

The Company is an exempted company duly incorporated, validly existing and in goodstanding under the laws of the Cayman Islands, has been in continuous existence sinceincorporation, has all corporate powers required to carry on its business as now conducted
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
and is duly qualified to do business in each jurisdiction where the nature of the properties
owned or leased by it or the activities conducted by it make such qualification necessary.
1.2.

The Company has not reduced, repaid or purchased any of its share capital, and except
as contemplated by the Transaction Documents or save as disclosed in the Prospectus,
there are no options or other agreements outstanding which call for the issue of or accord
to any Person the right to call for the issue of any shares in the capital of the Company or
the right to require the creation of any Encumbrance over any shares in its share capital.

1.3.

Except for the SPA or save as disclosed in the Prospectus, there is no subscription, option,
warrant, right to acquire, mortgage, charge, pledge, lien or other form of security (including
debt securities) or Encumbrance on, over or affecting the shares or capital in, or any of theassets or businesses of, the Company and there is no agreement or commitment to giveor create any of the foregoing.

1.4.

The copy of the M&AA disclosed to the Vendor or its Representatives is true, accurate andcomplete in all respects and contain full details of the rights and restrictions attached tothe share capital of the Company.

2.

CORPORATE STRUCTURE; SUBSIDIARIES

2.1.

The Company has no Subsidiary, and does not own, directly or indirectly, any equity
securities or other interests or investments (whether equity or debt) in any Person,
whether incorporated or unincorporated. The Company is not obligated to make any
investment in or capital contribution to or on behalf of any other Person.

3.

CIRCULAR

3.1.

Each of the Company Circular Sections (as at the date of issuance to the Shareholders
and the Completion Date), the draft copy of the Company Circular Sections (as at the dateof submission to the SGX-ST for review) and the PIPE Financing marketing documents as
it relates to the Company (as at their respective dates of issuance) contains, and in thecase of any amendment or supplement to the Circular as at the date of its issuance to the
Shareholders and the Completion Date will contain full and true disclosure of all material
facts about the Company.

3.2.

Each of the Company Circular Sections (as at the date of issuance to the Shareholders
and the Completion Date) and the draft copy of the Company Circular Sections (as at thedate of submission to the SGX-ST for review) contains, and in the case of any amendment
or supplement to the Circular as at the date of its issuance to the Shareholders and theCompletion Date will contain, all particulars and information required by, and is incompliance with all applicable provisions of, the SFA, the Mainboard Rules and all otherrequirements of the SGX-ST and the MAS.

3.3.

The statements of intention, opinion, belief or expectation contained in the Company
Circular Sections (as at the date of issuance to the Shareholders and the Completion
Date), the draft copy of the Company Circular Sections (as at the date of submission to the
SGX-ST for review), the PIPE Financing marketing documents as it relates to theCompany (as at their respective dates of issuance) and the SPA are, and in the case of
any amendment or supplement to the Circular at the date of its issuance to the
Shareholders and the Completion Date will be made after due, careful and properconsideration and, where appropriate, are based on assumptions referred to in each of the
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
Company Circular Sections (as at the date of issuance to the Shareholders and theCompletion Date), the draft copy of the Company Circular Sections (as at the date ofsubmission to the SGX-ST for review) and the PIPE Financing marketing documents as it
relates to the Company (as at their respective dates of issuance) and represent
reasonable and fair expectations based on all relevant facts known or which oughtreasonably to have been known by the Company and given in good faith after due andcareful enquiry.
4.

AUTHORISATION

4.1.

Other than the Company Shareholders’ Approval to be obtained at the EGM and approval
from the SGX-ST and the Securities Industry Council, the Company has all requisite
corporate power and authority to (i) enter into, execute, and deliver the SPA and each of
the other Transaction Documents to which it is or will be a party, and (ii) consummate thetransactions contemplated hereby and thereby (including the Transactions) and perform
all of its obligations hereunder and thereunder. The execution and delivery of the SPA andthe other Transaction Documents to which the Company is a party and the consummationof the transactions contemplated hereby and thereby (including the Transactions) havebeen duly and validly authorised and approved by the board of directors of the Company
in accordance with the M&AA and, other than the Company Shareholders’ Approval to beobtained at the EGM, no other company or corporate proceeding on the part of theCompany is necessary to authorise the SPA and the other Transaction Documents towhich the Company is a party and to consummate the transactions contemplated hereby
and thereby (including the Transactions). This Agreement has been, and at or prior to theCompletion Date, the other Transaction Documents to which the Company is a party willbe, duly and validly executed and delivered by the Company, and the SPA constitutes, andon or prior to the Completion Date, the other Transaction Documents to which theCompany is a party will constitute, a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except (a) as limited byapplicable bankruptcy, insolvency, reorganisation, moratorium, and other Applicable Laws
now or hereafter in effect of general application affecting enforcement of creditors’ rights
generally, and (b) as limited by Applicable Laws relating to the availability of specificperformance, injunctive relief, or other equitable remedies.

4.2.

Assuming that a quorum (as determined pursuant to the M&AA) is present, the approval
and authorisation of the SPA and the Transactions as an Proposed Business Combinationand the adoption and approval of a proposal for the adjournment of the EGM in each caseshall require approval by an ordinary resolution passed by the affirmative vote ofShareholders holding at least a majority of the outstanding Shares which, being so
entitled, are voted thereon in person or by proxy at a general meeting of the Company,
pursuant to the terms and subject to the conditions of the M&AA and Applicable Law(including the Mainboard Rules).

4.3.

The Company Shareholders’ Approval are the only votes and approvals of holders of
Shares required under the M&AA in connection with execution of the SPA and the otherTransaction Documents to which the Company is a party by the Company and theconsummation of the transactions contemplated hereby, including Completion.

4.4.

On or prior to the date of the SPA, the Board has duly adopted resolutions (i) determiningthat the SPA and the other Transaction Documents to which the Company is a party
contemplated hereby and the transactions contemplated hereby and thereby (including
the Transactions) are advisable and fair to, and in the best interests of, the Company and
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
constitute the Proposed Business Combination, (ii) authorising and approving theexecution, delivery and performance by the Company of the SPA and the otherTransaction Documents to which the Company is a party contemplated hereby and thetransactions contemplated hereby and thereby (including the Transactions), (iii) making
the Recommendation, and (iv) directing that the SPA, the Transaction Documents and theTransactions be submitted to Shareholders for adoption at the EGM called for such
purpose pursuant to the terms and conditions of the SPA.
5.

CONSENTS; NO CONFLICTS

5.1.

Assuming the Company Warranties in this Part D of Section D of Appendix K are true andcorrect, except (a) for the Company Shareholders’ Approval, (b) for the registration or filingwith the Registrar of Companies of the Cayman Islands, the SGX-ST or other securities
laws filings with respect to the Transactions and (c) for such other filings, notifications,notices, submissions, applications, or consents the failure of which to be obtained or madewould not individually or in the aggregate, have, or reasonably be expected to have, aMaterial Adverse Change on the ability of the Company to enter into and perform its
obligations under the SPA, all filings, notifications, notices, submissions, applications, orconsents from or with any Governmental Authority or any other Person required inconnection with the valid execution, delivery and performance of the SPA and the otherTransaction Documents, and the consummation of the Transactions, in each case on thepart of the Company, have been or will be duly obtained or completed (as applicable) andare or will be in full force and effect. The execution, delivery and performance of the SPA
and the other Transaction Documents to which it is or will be a party by the Company does
not, and the consummation by the Company of the transactions contemplated hereby andthereby will not (assuming the Company Warranties in this Part D of Section D ofAppendix K are true and correct, except for the matters referred to in clauses (a) through(c) of the immediately preceding sentence) (i) result in any violation of, be in conflict with,or constitute a default under, require any consent under, or give any Person rights oftermination, amendment, acceleration (including acceleration of any obligation of theCompany) or cancellation under, (A) any governmental order, (B) the M&AA, (C) any
Applicable Law, (D) any contract to which the Company is a party or by which its assets
are bound, or (ii) result in the creation of any Encumbrance upon any of the properties orassets of the Company other than any restrictions under the Mainboard Rules, the SPA or
the M&AA, except in the case of sub-clauses (A), (C), and (D) of clause (i) or clause (ii), as
would not have a Material Adverse Change.

6.

FINANCIAL STATEMENTS

6.1.

The financial statements of the Company contained in filings with the SGX-ST (the“Company Financial Statements”) (i) have been prepared in accordance with the books
and records of the Company, (ii) fairly present in all material respects the financial
condition of the Company on a consolidated basis as of the dates indicated therein, andthe results of operations and cash flows of the Company on a consolidated basis for theperiods indicated therein, (iii) were prepared in accordance with the IFRS applied on aconsistent basis throughout the periods involved, and (iv) comply in all material respects
with the applicable accounting requirements and with the rules and regulations of the
SGX-ST, the Mainboard Rules and the Applicable Law applicable to the Company, in effectas of the respective dates thereof.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
6.2.

The Company has no liability, and there is no existing condition, situation or set ofcircumstances which is reasonably expected to result in any liability, other than liabilities
reflected, or reserved against, in the Company Financial Statements.

7.

ABSENCE OF CHANGES

7.1.

Since the Company Accounts Date, (i) to the date of the SPA the Company has operated
its business in the ordinary course of business, and (ii) there has not been any Material
Adverse Change with respect to the Company.

8.

LITIGATION AND DISPUTES

8.1.

None of the Company or any person for whose acts or defaults the Company may bevicariously liable is involved in a civil, criminal, arbitration, administrative or otherproceeding.

8.2.

There are no fact or circumstance exists which might give rise to a civil, criminal,
arbitration, administrative or other proceeding involving the Company or a person forwhose acts or defaults the Company may be vicariously liable.

8.3.

None of the Company or any person for whose acts or defaults the Company may bevicariously liable has committed any criminal, illegal or other unlawful act or any breach ofcontract or statutory duty or any tortious or other act or default which could lead to a claim
or proceedings against the Company or give rise to or increase the liability or obligationof the Company or which could entitle any other person to terminate any contract to which
the Company is a party.

8.4.

There is not in force any court injunction, order or directive restraining or restricting theCompany from carrying on its business or any part thereof or entering into or performing
the SPA.

8.5.

There is no outstanding judgment, order or decree of any court, tribunal or regulatory or
government body or any undertaking to any court, judicial authority or regulatory or
Governmental Authority or any outstanding arbitration award against the Company, or aperson for whose acts or defaults the Company may be vicariously liable.

8.6.

There are no civil, criminal, administrative or disciplinary or arbitration proceedings inprogress, pending or threatened against the Company, or a person for whose acts ordefaults the Company may be vicariously liable and there are no facts likely to give riseto any such proceedings.

8.7.

There is not and has not been any governmental or other investigations, inquiries ordisciplinary proceedings by or before any regulatory, administrative, supervisory or
government body concerning the Company, whether on-going, pending or threatened andno fact or circumstance exist which might give rise to any such investigation, inquiry orproceedings.

9.

ESCROW ACCOUNT

9.1.

As of the date of the SPA, the Company has at least S$216.0 million in the Escrow Account(including an aggregate of approximately S$8.0 million of deferred underwriting
commissions and other fees being held in the Escrow Account (the “Deferred
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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
Expenses”)), including such monies invested in Singapore government securities ormoney market funds pursuant to the Escrow Agreement. There are no separate contracts
or side letters that would cause the description of the Escrow Agreement in the filings with
the SGX-ST to be inaccurate in any material respect or that would entitle any Person to
any portion of the proceeds in the Escrow Account, other than Shareholders (prior to theCompletion Date) who have exercised their Redemption Right pursuant to the M&AA (the“Company Shareholder Redemption Right”), and the underwriters of Company’s initialpublic offering with respect to the Deferred Expenses. Prior to Completion, none of thefunds held in the Escrow Account may be released other than as disclosed in the
Prospectus. There are no civil, criminal, administrative or disciplinary or arbitration
proceedings in progress, pending or threatened against the Company with respect to the
Escrow Account. The Company has performed all material obligations required to be
performed by it to date under, and is not in default, breach or delinquent in performanceor any other respect (claimed or actual) in connection with, the Escrow Agreement, and no
event has occurred which, with due notice or lapse of time or both, would constitute sucha default or breach thereunder. As of Completion, the obligations of the Company todissolve or liquidate pursuant to the M&AA shall terminate, and as of Completion, theCompany shall have no obligation whatsoever pursuant to the M&AA to dissolve andliquidate the assets of the Company by reason of the consummation of the Transactions.
As of the date of the SPA, following Completion, no shareholder of the Company is entitled
to receive any amount from the Escrow Account except to the extent such shareholder has
exercised his, her or its Company Shareholder Redemption Right. As of the date of the
SPA, assuming the accuracy of the Company Warranties and the compliance by the
Vendor with its obligations hereunder, the Company has no reason to believe that any of
the conditions to the use of funds in the Escrow Account will not be satisfied or funds
available in the Escrow Account will not be available to the Company on the Completion
Date.
10.

BUSINESS ACTIVITIES

10.1.

Since its incorporation, the Company has not conducted any business activities other thanactivities related to its initial public offering or directed toward the accomplishment of an“initial business combination”. Except as set out in the M&AA or as otherwise
contemplated by the Transaction Documents and the Transactions, there is no contract towhich the Company is a party which has or would reasonably be expected to have theeffect of prohibiting or impairing in any material respect any business practice of theCompany or any acquisition of property by the Company or the conduct of business by theCompany as currently conducted or as contemplated to be conducted as of Completion.

10.2.

Except for (i) the SPA and the other Transaction Documents to which it is party and thetransactions contemplated hereby and thereby, (ii) the Company Transaction Expenses,(iii) contracts with the underwriters of the Company’s initial public offering, and (iv) costs
and expenses incurred in the ordinary course of the Company’s operations, the Company
is not party to any contract with any other Person that would require payments by theCompany after the date hereof.

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APPENDIX K: TERMS AND CONDITIONS OF THE SPA
E.

DEFINITIONS
For the purposes of this Appendix K, unless otherwise defined in this Circular, capitalised
terms have the following meanings:“17LIVE Japan Privacy Policy” means 17LIVE Japan’s privacy policy, which is accessible
at: https://jp.17.live/copy-of-jp-privacy1/;“17LIVE Japan Service Terms and Conditions” means 17LIVE Japan’s service terms
and conditions, which are accessible at: https://jp.17.live/copy-of-service/;“17LIVE Japan User Terms and Conditions” means 17LIVE Japan’s user terms andconditions, which are accessible at: https://jp.17.live/copy-of-community/;“Anti-Corruption Laws” means all Applicable Laws relating to the prevention ofcorruption and bribery, including the U.S. Foreign Corrupt Practices Act of 1977;“App” means the “17LIVE” mobile application;“Applicable Law” means any constitution, law, treaty, statute, ordinance, policy, code,
rule, regulation, executive order, administrative order or other order, arbitration award,
judgment, decree, temporary restraining order, injunction, determination or judicial
interpretation of any Governmental Authority or any agreement or commitment with any
Governmental Authority;“Audited Accounts” means the audited consolidated accounts of the Group for each of
the past financial years ended 31 December 2020, 31 December 2021 and 31 December
2022;“Business IP” means all Intellectual Property Rights which, at Completion, are used or
enjoyed or capable of being used or enjoyed, in or in connection with the business of aGroup Company;“Company Accounts Date” means 30 June 2023;“Company Circular Sections” means the sections or sub-sections of the Circular drafted
and confirmed by the Company, namely, “Rationale for the Proposed Business
Combination”, “Use of Proceeds Raised from the Company’s Initial Public Offering”, “Useof Interests and Income Derived from the Amounts in the Escrow Account”, “Enlarged
Group Corporate and Shareholding Structure – Corporate Structure of the Company
before Completion”, “Share Price and Markets”, “Dividend Policy – The Company” and“Material Contracts – The Company”;“Company Shareholders’ Approval” means the approval by the Shareholders in relation
to the Transactions, which shall include, inter alia:(a)the entry into and execution of the SPA by the Company with the Vendor, theManagement Warrantors and the Founder and the Proposed Business Combination;(b)

the allotment and issue of the Consideration Shares in favour of the Vendor;(c)the allotment and issue of the Earnout Shares;
K-58

APPENDIX K: TERMS AND CONDITIONS OF THE SPA(d)the allotment and issue of the EIS Shares pursuant to the EIS;(e)

the allotment and issue of the PIPE Shares;(f)

the allotment and issue of the Special Bonus Shares;(g)

the adoption of the Company ESOP;(h)the allotment and issue of the ESOP Shares pursuant to the Company ESOP;(i)the adoption of the EIS;(j)

the change of name of the Company to “17LIVE Group Limited”; and(k)the adoption of the New M&AA;“Company Transaction Expenses” means any out-of-pocket fees and expenses payable
by the Company or any of its affiliates (whether or not billed or accrued for) as a result ofor in connection with the negotiation, documentation and consummation of theTransactions, including (a) all fees, costs, expenses, brokerage fees, commissions,finders’ fees and disbursements of the Joint Financial Advisers and the Sole Issue
Manager, investment banks, data room administrators, attorneys, accountants and otheradvisers and service providers, including consultants and public relations firms, and(b) any and all filing fees payable by the Company or affiliates to the Governmental
Authorities in connection with the Transactions;“Company Warranties” has each of the statements set out in Part D of Section D ofAppendix K of this Circular;“Disclosed” in relation to a fact, matter or circumstance which may give rise to a Claim,means fully and fairly disclosed, and disclosed with such accuracy and in sufficient detailso as to enable the Company, acting reasonably, to identify the nature and scope of thematter disclosed and to make an informed and accurate assessment of the matter
concerned;“Disclosure Letter” means the letter to be delivered by the Vendor to the Company on thedate of the SPA and as may be updated by the Vendor only in relation to the specificdiligence matters set out in Clause (d) of Section A of Appendix K and Clause 4 of Section
B of this Circular prior to the Completion Date;“Encumbrance” means any mortgage, debenture, hypothecation, charge, title retention,right to acquire, security interest, lien, pledge, assignment by way of security, equity,
claim, right of pre-emption or other similar right, right of first refusal, option, covenant,restriction, third-party right or interest, reservation, lease, trust, order, decree, judgment,
title defect (including retention of title claim), conflicting claim of ownership or any otherencumbrance, condition or security interest of any nature whatsoever (whether or not
perfected other than liens arising by operation of law), including any such right or interest
arising at Completion or otherwise in connection with the SPA, or any other type ofpreferential arrangement (including without limitation, a title transfer or retention
arrangement) having similar effect, or an agreement, arrangement or obligation to create
any of the foregoing;

K-59

APPENDIX K: TERMS AND CONDITIONS OF THE SPA“Founder Warranties” means each of the statements set out in Part C of Section D ofAppendix K of this Circular;“GMS” means a general meeting of the shareholder(s) of 17LIVE Japan from time to time;“Government Official” means any officer or employee of a Governmental Authority,
including state-owned entities, or of a public organisation or any person acting in an official
capacity for or on behalf of any such Governmental Authority or on behalf of any such
public organisation;“Governmental Authority” means any federal, state, provincial, municipal, local orforeign government, governmental authority, regulatory or administrative agency,
governmental commission, department, board, bureau, agency or instrumentality, court,
arbitral body (public or private) or tribunal;“Group” means the Group Companies, taken as a whole;“Group Companies” means the Target Company and each and any of its Subsidiaries
from time to time and “Group Company” means any one of them;“GToU” means the 17LIVE Japan Service Terms and Conditions and 17LIVE Japan User
Terms and Conditions collectively;“Intellectual Property Rights” means all intellectual property rights, whether registeredor not, including pending applications for registration of such rights and the right to apply
for registration or extension of such rights including patents, petty patents, utility models,design patents, designs, copyright (including moral rights and neighbouring rights),
database rights, and other sui generis rights, trade marks, trading names, company
names, service marks, logos, the get-up of products and packaging, geographicalindications and appellations and other signs used in trade, internet domain names, social
media user names, rights in know-how and any rights of the same or similar effect or
nature as any of the foregoing anywhere in the world;“Interim Accounts” means the interim reviewed consolidated accounts of the Group forthe six months ended 30 June 2022 and/or for the six months ended 30 June 2023;“Last Accounting Date” means 31 December 2022;“Leases” means the leases, tenancies and licences, details of which are set out in the
SPA, and “Lease” means any one of them;“Management Warrantor Warranties” means each of the statements set out in Part B of
Section D of Appendix K of this Circular;“MAS” means the Monetary Authority of Singapore;“Material Adverse Change”, in relation to a Person, means a material adverse change inits business, operations, assets, financial condition or prospects taken as a whole,provided that in no event shall any of the following be taken into account in determining
whether there has been a material adverse change: (i) general political, social, economic,
or business conditions in the regions in which such Person operates; (ii) in financial,banking, or securities markets (including any disruption thereof); (iii) acts of war, terrorism,
K-60

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
or other similar events, whether or not pursuant to the declaration of a national emergency
or war, or the occurrence of any military or terrorist attack; (iv) natural disasters, including
earthquakes, wild fires, floods, mud slides, tsunamis, storms, and other similar force
majeure events; and (v) any events resulting from any actions taken by such Person
pursuant to the SPA or any other Transaction Document or that are expressly requested
or consented to by the parties hereto or thereto in advance or any actions not taken bysuch Person with the express written consent of the parties hereto or thereto;“OFAC” means the U.S. Department of the Treasury, Office of Foreign Assets Control;“Permit” means:(a)a permit, licence, consent, approval, certificate, qualification, specification,
registration or other authorisation; or(b)a filing of a notification, report or assessment,in each case, necessary for the effective operation of any Group Company’s business or
its ownership, possession, occupation or use of an asset or the execution or performanceof the SPA;
“Person” means any individual, firm, corporation, partnership, limited liability company,
incorporated or unincorporated association, joint venture, joint stock company,
Governmental Authority or other entity of any kind;“Policies” means each of the insurance and indemnity policies in respect of which a Group
Company has an interest, and “Policy” means any one of them;“Properties” means all of the properties occupied by a Group Company pursuant to the
Leases, and “Property” means any one of them;“Representatives” means, in relation to a party, its advisers, agents, employees, officers
or other representatives;“Restricted Transaction” means each and any of the following: (a) any investment in the
Vendor or any Group Company; (b) the disposal (whether by way of sale, offer, transfer orotherwise) of all or any part of, or any interest in, the issued share capital of the Vendor
or any Group Company; (c) the disposal (whether by way of sale, offer, transfer orotherwise) of all, or any part of, the business, assets or undertaking of the Vendor or any
Group Company, other than in the ordinary course of trading; or (d) any other disposal,
merger, business combination or similar transaction involving the Vendor or any Group
Company;“Sanctioned Country” means any country or region that is currently the subject or targetof a comprehensive embargo under Sanctions Laws, which at the time of the SPA includes
Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People’s Republic, and Luhansk
People’s Republic regions of Ukraine;“Sanctioned Person” means any individual or entity that is the subject or target of
sanctions or restrictions under Sanctions Laws, including: (a) any Person listed on any
U.S. or non-U.S. sanctions- or export-related restricted or prohibited party list, including
OFAC’s Specially Designated Nationals and Blocked Persons List, OFAC’s Sectoral
K-61

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
Sanctions Identification List, the Entity, Denied Persons and Unverified Lists maintainedby the U.S. Department of Commerce, the UN Security Council Consolidated List, and the
EU Consolidated List; (b) any Person that is, in the aggregate, 50% or greater owned,
directly or indirectly, or otherwise controlled by a Person or Persons listed on OFAC’s
Specially Designated Nationals and Blocked Persons List; or (c) any national of a
Sanctioned Country;“Sanctions Laws” means all Applicable Laws relating to economic or trade sanctions,
including the laws administered or enforced by OFAC, or the U.S. Department of State, theUnited Nations Security Council, and the European Union or any member state thereof, or
any other national economic sanctions authority;“Subsidiary” means in relation to a company wherever established (in this case, theholding company), any other company in which the holding company (or a Person acting
on its behalf) directly or indirectly holds or controls either (a) a majority of the voting rights
exercisable at general meetings of the company; or (b) the right to appoint or remove
directors having a majority of the voting rights exercisable at meetings of the board of
directors of the company;“Tax”, “Taxes” or “Taxation” means: (a) any tax or duty, or any levy, impost, charge orwithholding having the character of taxation, wherever chargeable, imposed for support ofnational, state, federal, cantonal, municipal or local government or any othergovernmental or regulatory authority, body or instrumentality, including tax on gross or net
income, profits or gains, taxes on receipts, sales, use, occupation, franchise, transfer,value added and personal property and social security taxes as well as employmentrelated taxes, stamp duties, custom duties and import/export duties; and (b) any penalty,
fine, surcharge, interest, loss of relief, cess, charges or additions to taxation payable inrelation to any taxation within paragraph (a) above;“Taxation Authority” means any taxing or other authority competent to impose any
liability in respect of Taxation or responsible for the administration and/or collection of
Taxation or enforcement of any law in relation to Taxation;“Third Party” means any person other than the Company or any of its respective officers,
employees, agents or advisers;“Third Party Negotiations” means any discussions or negotiations relating to orotherwise concerning a Restricted Transaction, between a Third Party and the Vendor or
any Group Company (or any of its respective Representatives);“Trade Controls” means Sanctions Laws or anti-boycott Applicable Laws;“Transaction Documents” means the SPA, the PIPE Subscription Agreements, theManagement and/or Placement Agreement, the New M&AA, the Company ESOP, the EIS
and any other agreements entered into in connection with the SPA;
“Transactions” means, collectively, the Proposed Business Combination and each of theother transactions contemplated by the SPA or any of the other Transaction Documents;“Vendor Circular Sections” means the sections or sub-sections of the Circular drafted
and confirmed by the Vendor, namely “Information on the Target Company”, “Prospects,
Business Strategies and Future Plans”, “Risk Factors – Risks relating to business and
K-62

APPENDIX K: TERMS AND CONDITIONS OF THE SPA
industry of the Target Group”, “Risk Factors – Risks relating to doing business injurisdictions in which the Target Group operates”, “Selected Financial Information of theTarget Group”, “Management’s Discussion and Analysis of Financial Position and Resultsof Operations of the Target Group”, “Capitalisation and Indebtedness”, “Financial Effectsof the Proposed Transactions”, “No Material Effect on Financial Position”, “Use ofProceeds Raised from the PIPE Financing and the Completion Remaining Escrow
Account”, “Enlarged Group Corporate and Shareholding Structure” (save for the
sub-sections “Corporate Structure of the Company before Completion” and “Moratorium”),“Proposed Directors and Executive Officers”, “Interested Person Transactions andPotential Conflicts of Interest”, “Dividend Policy” (save for the sub-section “TheCompany”), “Material Contracts – The Target Company”, “Material Litigation”, “Exchange
Control and Taxation”, “General and Statutory Information (Including Material Background
Information) – Material Background Information on the Proposed Directors, Proposed
Executive Officers and Controlling Shareholders of the Company”, as well as theappendices to the Circular drafted and confirmed by the Vendor, namely “Independent
Auditor’s Report and Audited Consolidated Financial Statements of the Target Group for
the Financial Years Ended 31 December 2020, 2021 And 2022”, “Interim Consolidated
Financial Statements of the Target Group for the Six-Month Period Ended 30 June 2022
and 30 June 2023”, “Unaudited Proforma Consolidated Financial Information of theEnlarged Group for the Financial Year Ended 31 December 2022 and the Six-Month
Period ended 30 June 2023”, “Government Regulations” and “Intellectual Property Rightsof the Target Group”;“Warrantors” means the Vendor and the Target Company; and“Warrantor Warranties” each of the statements set out in Part A of Section D ofAppendix K of this Circular.

K-63

This page has been intentionally left blank.

APPENDIX L: INTELLECTUAL PROPERTY RIGHTS OF THE TARGET GROUPINTELLECTUAL PROPERTY RIGHTS OF THE TARGET GROUP
Trademarks

TrademarkPlace ofRegistration

Registered
Owner

Registration
NumberJP

17LIVE
Japan Inc.

TW

Class

Expiry Date

6137190

9, 35, 38,
41, 4512 April 2029

17Live Inc.

0198212935

15 April 2029

TW

17Live Inc.

01959459

38

15 December
2028

TW

17Live Inc.

01982583

41

15 April 2029

TW

17Live Inc.

0200325145

31 July 2029

TW

17Live Inc.

02105328

35

30 November
2030

TW

Wave Inc.

2242470

09

15 August2032

JP

17LIVE
Japan Inc.

6456797

35, 4215 October
2031

TW

Ichi Nana
Inc.

01940083

38

15 September
2028

TW

Ichi Nana
Inc.

01940084

38

15 September
2028

TW

17LIVE
Japan Inc.

02205503

09

29 February
2032

TW

17LIVE
Japan Inc.

0221604235

15 April 2032

TW

17LIVE
Japan Inc.

02194187

38

31 December
2031

TW

17LIVE
Japan Inc.

02194247

41

31 December
2031

TW

17LIVE
Japan Inc.

02207073

42

29 February
2032

TW

17LIVE
Japan Inc.

02126377

45

28 February
2031

17 mediaJP

17LIVE
Japan Inc.

6137192

9, 35, 38,
41, 4512 April 2029

17LIVEJP

17LIVE
Japan Inc.

6043653

9, 41, 45

18 May 2028

Baby Coin

L-1

APPENDIX L: INTELLECTUAL PROPERTY RIGHTS OF THE TARGET GROUP

TrademarkPlace ofRegistration

Registered
Owner

Registration
NumberJP

17LIVE
Japan Inc.

6333533

35, 3623 December
2030

TW

HandsupCompany
Limited2280878915 February
2033

TW

HandsupCompany
Limited2262949

35

15 November
2032

TW

HandsupCompany
Limited226356142

15 November
2032

TW

Wave Inc.

NA

9, 38, 41,
42, 45pendingClass

Expiry Date

Note:
General coverages of Class can be found at https://www.wipo.int/classifications/nice/nclpub/en/fr/pdfdownload.pdf?lang=en&tab=class_headings&dateInForce=20230101. Classes of each trademark listed above may be
modified in order to conform to local trademark law and practice. Examples of coverages of each Class are provided below.
Class 9:Scientific, research, navigation, surveying, photographic, cinematographic, audiovisual, optical, weighing,measuring, signalling, detecting, testing, inspecting, life-saving and teaching apparatus and instruments;
apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling the
distribution or use of electricity; apparatus and instruments for recording, transmitting, reproducing orprocessing sound, images or data; recorded and downloadable media, computer software, blank digital or
analogue recording and storage media; mechanisms for coin-operated apparatus; cash registers, calculating
devices; computers and computer peripheral devices; diving suits, divers’ masks, ear plugs for divers, nose
clips for divers and swimmers, gloves for divers, breathing apparatus for underwater swimming; fireextinguishing apparatus.

Class 35: Advertising; business management, organisation and administration; office functions.
Class 36: Financial, monetary and banking services; insurance services; real estate services.
Class 38: Telecommunications services.
Class 41: Education; providing of training; entertainment; sporting and cultural activities.
Class 42: Scientific and technological services and research and design relating thereto; industrial analysis, industrial
research and industrial design services; quality control and authentication services; design and development ofcomputer hardware and software.
Class 45: Legal services; security services for the physical protection of tangible property and individuals; dating services,
online social networking services; funerary services; babysitting.

L-2

APPENDIX L: INTELLECTUAL PROPERTY RIGHTS OF THE TARGET GROUP
Patents

Registered
No.
Owner

Nature and
Description

Application No./
Territory Registration No.

Filing Date/
Registration
Date

StatusExpiry Date

1.

17LIVEJapan

Frame imageof a group call(design patent)Japan

2021-025749/
1713562S

25 November Registered 25 November
2021/15 April
2046
2022

2.

17LIVE Inc. Frame imageof a group call(design patent)

Taiwan110302958/
TWD218549

7 June 2021/
1 May 2022

3.

17LIVEJapan

Invention related Japanto gifting in live
streaming

2021-212061/
707171827 December Registered 27 December
2041
2021/11 May
2022

4.

17LIVEJapan

Invention related Japanto gifting in live
streaming

2022-027946/
7125729

25 February
2022/
17 August2022

Registered 25 February
2042

5.

17LIVEJapan

Invention related Japanto gifting in live
streaming

2022-073122/
7129666

27 April
2022/
25 August2022

Registered 27 April 2042

6.

17LIVEJapan

InventionJapan
related torecommendation
using machinelearning in live
streaming

2022-034882/
7207905

8 March2022/
27 January
2023

Registered 8 March 2042

7.

17LIVEJapan

Invention related Japantorecommendation
using machinelearning in live
streaming

2022-026204/
7217902

22 February
2022/
27 January
2023

Registered 22 February
2042

8.

17LIVEJapan

Invention related Japanto rejoining
feature during
live streaming
after network
disconnection

2023-043668/
7302806

Registered 19 March
19 March2023/26 June
2043
2023

9.

17LIVEJapan

Invention related Japanto tipping gift for
in-app games

2023-007325/
7284909

20 January
2023/24 May
2023

10.

17LIVEJapan

Invention related Japan
to S+ latency
technology

2022-187749/
7333534

24 November Registered 24 November
2022/
2042
17 August
2023

L-3

Registered 7 June 2036

Registered 20 January2043

This page has been intentionally left blank.

APPENDIX M: SUMMARY VALUATION LETTER
9 November, 2023
Frost & Sullivan Limited
Unit 3006, 30/F
Two Exchange Square
8 Connaught Place, Central, Hong Kong
Independent Valuation of 17LIVE Inc.
To:
Board of Directors
Vertex Technology Acquisition Corporation Ltd
250 North Bridge Road
#11-01 Raffles City Tower
Singapore 179101
Dear Board of Directors:
1. Introduction
On 2 October 2023, Vertex Technology Acquisition Corporation Ltd (“VTAC” or the “Company”)
announced that it had entered into a sale and purchase agreement in relation to the proposedbusiness combination between VTAC and 17LIVE Inc. (“17LIVE” or the “Target Company”) by wayof an acquisition by VTAC of the entire issued and paid-up share capital of the Target Company(the "Proposed Business Combination"). In connection with the Proposed Business Combination,
Frost & Sullivan Limited has been appointed by VTAC to provide an independent valuation of the
100% equity value of the Target Company as at 30 June 2023 (the “Valuation Date”) for the
purposes of allowing VTAC's shareholders to assess the merits of the Proposed Business
Combination and vote on the resolutions set out in the Circular. The valuation report complies with
the Minimum Requirements for Performing Valuations and Issuing Business Valuation Reports
specified by the Singapore Exchange Securities Trading Limited (the "SGX-ST").
This summary valuation letter (the "Letter") has been prepared for the purpose of incorporation in
the circular dated 9 November 2023 to be issued by VTAC (the "Circular") in relation to the
Proposed Business Combination, and is a summary of the information contained in our valuation
report dated 9 November 2023 (the "Valuation Report"). Accordingly, this Letter should be read in
conjunction with the full text of our Report. Unless otherwise stated, all capitalised terms used inthis Letter shall have the same meanings ascribed to them in the Circular.
The scope of our work encompasses a valuation of 100% of the equity in 17LIVE. In our valuation
report, we employ both the income approach, specifically the Discounted Cash Flow (DCF) method,
and the market approach, including Price-to-Sales (P/S) and Enterprise Value-to-EBITDA(EV/EBITDA) ratios, for a comprehensive assessment. The valuation is expressed in US dollars,
and the base date of valuation is set at 30 June 2023.

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APPENDIX M: SUMMARY VALUATION LETTER
2. Statement of Independence
The Valuation Report is prepared independently by Frost & Sullivan Limited for VTAC to assess
the valuation of 17LIVE for the proposed business combination between VTAC and 17LIVE. As thevaluer, Frost & Sullivan Limited does not have any connection or involvement with the subject
asset or the other parties to the valuation assignment. Frost & Sullivan Limited is in a position toprovide an objective and unbiased valuation, and has the requisite knowledge and experience toundertake the valuation.

3. Target Company Business Highlights
The Target Company is a pure play live streaming platform with a leading position in Japan andTaiwan. The Target Company offers a diverse live streaming ecosystem, an engaged user
community, a deep pool of live streamers, localised products and content, as well as innovative V
Livers, in app games, and live commerce, all of which are integrated into its live streaming business.
The Target Company's business lines include Liver live streaming, V-Liver live streaming and otherbusinesses.
3.1 Liver Live Streaming business highlights of 17LIVE include:
High quality live streamers. 17LIVE empowers live streamers with a globally accessible platform,
user-friendly interface, in-house training, an end-to-end management system, and a contract
model that ensures a sustainable supply of innovative, original, and unique content from talented
live streamers.
Loyal and highly engaged users. The Target Company excels in catering to user preferences
and cultural nuances by localizing its products and content across multiple markets, driven by local
teams. Additionally, the Target Company leverages big data analytics and AI-powered content
monitoring to enhance user experiences and provide valuable guidance to live streamers, boostingaudience engagement.
3.2 V-Liver live streaming business highlights of 17LIVE include:
Immersive V-Liver technology. The Target Company enhanced the V-Liver experience byseamlessly integrating Live2D, enabling avatar creation and virtual streaming via smartphones,
thereby significantly lowering the barriers to becoming a V-Liver. Additionally, VRM3D and hand
gesture recognition were incorporated, enhancing user immersion and interactivity within theecosystem.
Talent management. The Target Company supports V-Liver talents through an end-to-end talentmanagement approach, helping them build a follower base within the 17LIVE ecosystem.

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APPENDIX M: SUMMARY VALUATION LETTER
V-Liver proprietary IPs. The Target Company uniquely integrates V-Liver agency with its live
streaming ecosystem, connecting exclusive V-Livers with users. It also identifies and nurture highpotential V-Livers through online competitions and offline events.
3.3 Other businesses (including live commerce and audio live streaming) highlights of
17LIVE include:
Infrastructure support. The Target Company provides essential infrastructure support for livecommerce campaigns, ensuring smooth execution, uninterrupted audio live streaming, andseamless user interactions.
Data insights. Through partnerships with fast-moving consumer goods brands to analyze
consumer behavior, the Target Company can identify products that suit the shopping needs of its
user base. It subsequently invites the appropriate live streamers, also including V-Livers to promotethese products, attracting more traffic.

4. Valuation Methodology
Frost & Sullivan Limited used P/S and EV/EBITDA within market approach and DCF (discounted
cash flow) within income approach to determine the value of the Target Company. The following
factors were considered by Frost & Sullivan Limited:
By referencing the valuation levels of comparable publicly traded companies within same industry,
it determines the equity value of the subject company. In the comparable analysis, commonly usedreference metrics include the price-to-sales ratio (P/S) and the enterprise value-to-EBITDA(earnings before interest, taxes, depreciation, and amortization) multiple, among others. P/S isoften used to value growth stocks and especially unprofitable early-stage firms, facilitatescomparisons across different companies, and helps identify growth stocks, especially unprofitableearly-stage firms. EV/EBITDA is commonly used in the market approach valuation because it
incorporates debt, adjusts for cash holdings, and eliminates distortions from varying depreciation
methods. EBITDA, which assesses operating profits before depreciation and amortization, offers
a standardized measure for comparing companies and aids in the normalization of the assessment
process. As common forms of market approach valuation, P/S and EV/EBITDA are employed in
the valuation report.
DCF is commonly used in the income approach valuation because it provides a comprehensive
framework by considering the stream of future cash flows, incorporating the time value of money,
accommodating different growth scenarios, etc. As a common form of income approach valuation,
DCF is employed in the valuation report. The discounted cash flow (DCF) is an income-based
approach to valuation that is based upon the theory that the value of a business is equal to thepresent value of its projected future benefits (including the present value of its terminal value). The
basis for selecting the income approach was due to the availability of relevant data, specifically thehistorical operating records and development plans of the Target Company for each of its business
M-3

APPENDIX M: SUMMARY VALUATION LETTER
segment. Financial information is available for each business and Frost & Sullivan Limited is able
to understand and analyze each business and model the financial forecast.

5. Valuation Conclusions
Based on two methods, multiple approach (P/S and EV/EBITDA ratio) and DCF approach, Frost &Sullivan Limited concluded that the market value of 100.0% equity interest in the Target Company
as of 30 June 2023 is reasonably stated in the amount that ranges from USD697.2 million to
USD750.6 million, with a median of USD723.9 million.

Valuation
Methodology

Valuation Range(USD Million)

Multiple Valuation

697.2 - 750.6

DCF Valuation

Overlapping Valuation
Range (USD Million)

Median of Overlapping
Range (USD Million)

697.2 - 750.6

723.9

666.0 – 769.0

6. Multiple valuation
Due to the Target Company’s business model and profitability profile, P/S and EV/EBITDA ratios
were adopted to derive the valuation of 17LIVE. Frost & Sullivan Limited believes that price-tosales (P/S) ratio and enterprise value-to-EBITDA (EV/EBITDA) are most suitable to evaluate
17LIVE. P/S is commonly used to value live streaming platforms as many publicly traded
comparable companies in the live streaming and V-liver industries are still unprofitable or at an
early stage of profitability. EV/EBITDA is also employed as the Target Company has generated
positive EBITDA since 2020 with increasing emphasis on profitability.
6.1 P/S Ratio Valuation Overview
The price-to-sales (P/S) ratio is a valuation ratio that compares a company’s stock price to its
revenues. It is an indicator of the value that financial markets have placed on each dollar of acompany’s sales or revenues.
The ratio shows how much investors are willing to pay per dollar of sales. It can be calculated
either by dividing the company’s market capitalization by its total sales over a designated period(usually twelve months) or on a per-share basis by dividing the stock price by sales per share. Like
all ratios, the P/S ratio is most relevant when used to compare companies in the same sector. A
low ratio may indicate the stock is undervalued, while a ratio that is significantly above the average
may suggest overvaluation.
The challenges in using the P/S ratio are as follows. This approach only considers the ratio of sales
revenue to market value, while neglecting important indicators such as a company's profit.
M-4

APPENDIX M: SUMMARY VALUATION LETTER
Additionally, the P/S valuation method does not consider factors like a company's future growthpotential or the competitive landscape of the industry. Moreover, P/S ratio only considers a single
year, so when using this method, it is necessary to assume that comparable companies and thecompany being valued have similar future growth potential.
Additionally, applying a liquidity discount is a common practice in valuation of unlisted companies.
Based on the nature of the Target Company as an unlisted company, a 15% to 20% liquidity
discount was applied to the valuation results and such range of the liquidity discount applied is inline with market practice.
6.2 EV/EBITDA Ratio Valuation Overview
The EV/EBITDA ratio is a financial metric used to evaluate the value of a company relative to its
earnings before interest, taxes, depreciation, and amortization (EBITDA). The ratio measures acompany’s enterprise value (EV) divided by its EBITDA. The adjusted EBITDA is used for
calculating the multiple ratios for comparable companies and the adjustment adopted in thevaluation report is consistent with the Target Company’s accounting treatment disclosed in
Shareholders’ Circular, the Target Company defines adjusted EBITDA as operating income before
depreciation and amortization and net of share-based payment. Frost & Sullivan Limited has
considered the Target Company’s industry positioning, product offerings, geographic presence andother factors.
The challenges in using the EV/EBITDA ratio are as follows. The EV/EBITDA approach is more
complex to calculate and EBITDA intentionally excludes tax factors. Therefore, if there are
significant differences in tax policies enjoyed by different companies, the effectiveness of thismetric's calculation can be greatly reduced. Additionally, one of the key factors in determining theenterprise value is the expected growth rate. Moreover, EBITDA only considers a single year, sowhen using this method, it is necessary to assume that comparable companies and the company
being valued have similar future growth potential. In reality, such an assumption is often not valid.
The assumptions in using the EV/EBITDA ratio are as follows. In the live streaming and V-liverindustries, there are many publicly traded comparable companies that still have EBITDA loss.
However, the Target Company has registered positive EBITDA since 2020, and has maintained astable EBITDA margin since then. Compared to other comparable companies with positive EBITDA,
the Target Company has a comparable advantage in EBITDA margin. Additionally, the company's
future strategic plan is expected to place a stronger emphasis on profitability. Driven by factors
such as cost-effective marketing and V-liver content to drive organic user growth, we expect
17LIVE to achieve rapid EBITDA growth. Therefore, when analyzing EV/EBITDA valuation, a 15%
to 20% premium was applied to the valuation results to account for the Target Company's
advantages and such range of the premium applied is in line with market practice.
Additionally, applying a liquidity discount is a common practice in valuation of unlisted companies.
Based on the nature of the Target Company as an unlisted company, a 15% to 20% liquidity
discount was applied to the valuation results and such range of the liquidity discount applied is in
M-5

APPENDIX M: SUMMARY VALUATION LETTER
line with market practice.
For the avoidance of doubt, a control premium is not applied when comparing the Target Group’s
P/S and EV/EBITDA ratios to those of its selected peers. A control premium is not applicable inthis case primarily due to the nature of the SPAC, which is created with the purpose of raising
capital through an initial public offering, and essentially creates a reverse acquisition.
Control premium typically arises in specific transactions, for example, if shareholders of the target
company oppose a merger, the acquirer might need to pay a higher control premium to persuade
the shareholders to accept the deal, which does not apply to the current situation.

6.3 Summary of Main Considerations for Peers Selection
P/S ratio. In the selection of comparable companies, the valuation report mainly considers thefollowing indicators as the reference basis for the selection of comparable companies: 1)
Comparable companies are listed companies engaged in similar or similar business with the Target
Company; 2) When the comparable company satisfies Condition 1), preference shall be given to
the company whose business takes place in Japan. After considering the Target Company's
industry position, business coverage, location and other factors, the comparable companies in theindustry that can be considered and determined include ANYCOLOR, DeNA, Kuaishou, Bilibili,
JoYY.
EV/EBITDA ratio. In the selection of comparable companies, the valuation report mainly considers
the same indicators with P/S approach as the reference basis for the selection of comparable
companies. In additional to the two criteria considered for P/S approach, we have also consideredthat comparable companies need to have positive EBITDA during the 12 months period from theValuation Date. After considering the Target Company's industry status, business coverage,
location and other factors, the comparable companies in the industry that can be considered anddetermined include ANYCOLOR, DeNA, Kuaishou, JoYY.

M-6

APPENDIX M: SUMMARY VALUATION LETTER
.4 Comparison of trading metrics and operating performance of selected peers(USD million) Market
capitalisation

Total
enterprisevalue

Business description

Kuaishou
HKG: 1024

29,624.2

29,422.1

Kuaishou Technology (“Kuaishou”) is a leading
content community and social platform that
continues to create value for users throughinnovation and optimization of products andservices. The Kuaishou platform enables
users to record and share life experiences
through short videos and live streaming.

Bilibili
HKG:9626/
NASDAQ:
BILI

6,183.4

6,476.1

Bilibili Inc. (“Bilibili”) is a leading videocommunity and symbolic brand for the
younger generation in China. The company
offers a full range of video content for multiple
interests and has built an engaging community
around users, high-quality content and thestrong emotional bonds within it, spanning
lifestyle, gaming, entertainment, anime, as
well as technology and knowledge.

JOYY
1,903.8
NASDAQ: YY

1,642.5

JOYY Inc. (“JOYY”) is a global technology
company dedicated to enriching people's lives
through technological innovation, mainly
operating innovative social platforms such as
Bigo Live, Likee and Hago, covering morethan 150 countries and connecting hundredsof millions of users around the world.

ANYCOLOR
TYO: 5032

1,669.21

1,584.8(1)ANYCOLOR Inc. (“ANYCOLOR”) is aninnovative company based on advanced
technology to change the entertainment
industry. It deeply utilizes virtual technology
and real-time interactive platform to build aunique entertainment ecosystem, aiming toprovide users around the world with richer andimmersive entertainment experience.

DeNA
TYO: 2432

1,582.8

1,272.1

DeNA Co., Ltd. (“DeNA”) is a mobile andonline services company founded in Tokyo in
1999, specializing in the development andoperation of games, e-commerce, andentertainment content distribution.

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APPENDIX M: SUMMARY VALUATION LETTER(USD million)

LTM Sales

LTM EBITDA

P / LTM Sales

EV / LTM
EBITDA

Kuaishou

14,445.7

1,183.8

2.1x

24.9x

Bilibili(2)3,087.5-332.42.0x

N.M.

JOYY(3)2,322.6

258.2

0.8x

6.4x

ANYCOLOR(4)

175.6

66.2

9.5x

23.9x

DeNA

944.5

52.2

1.7x

24.4x

3.2x

19.9x

Mean
Note: market capitalization and total enterprise value as of 30 June 2023
1)

ANYCOLOR’s TEV is calculated by the market capitalisation as of June 30, 2023 minus the net cash asof April 30, 2023, which refers to the end of latest fiscal period disclosed as of June 30, 2023.

2)

Bilibili did not achieve positive adjusted EBITDA during the last twelve months ended June 30, 2023.

3)

JOYY’s adjusted EBITDA represents adjusted EBITDA for the fiscal year ended December 31, 2022 dueto the availability of EBITDA disclosure.

4)

ANYCOLOR’s sales and adjusted EBITDA represent the results for the fiscal year 2023 ended April 30,
2023, which is the latest fiscal period disclosed as of June 30, 2023.

6.5 Summary of Market Approach Valuation Results
The valuation arising from the market approach is a weighted average of the implied equity valueof P/S and EV/EBITDA-based valuation methodologies. Frost & Sullivan Limited applied a 60%
weight to P/S multiple and 40% weight to EV/EBITDA multiple for the valuation since there are 5
available comparable companies for P/S and 4 available comparable companies for EV/EBITDA.
As a result, the implied equity value of the Target Company using market approach is from USD
697.2 million to USD 750.6 million.
7. DCF (discounted cash flow) Valuation
7.1 DCF Approach Overview
The DCF approach refers to estimating the value of a company based on forecasts of the Target
Company's future business development. It predicts the Target Company's future free cash flows
and discounts these cash flows at an appropriate discount rate, summing them up to estimate theTarget Company's value. Considering the composition of assets and the characteristics of the corebusiness of the Target Company in this assessment, the basic approach of this evaluation is to

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APPENDIX M: SUMMARY VALUATION LETTER
estimate its equity value based on the audited financial statements of the evaluation subject andoverlay with forecast and projected estimates assessed and prepared independently by Frost &Sullivan Limited.
In other words, the assessment begins by using the DCF method based on the income approachto estimate the value of the on-going operational business of the evaluation subject, and deriving
the enterprise value of the evaluation subject. The enterprise value is then reduced by the valueof interest-bearing debt and minority shareholders' equity, and added to the cash and short-term
investments held by the Target Company, resulting in the total equity value of the evaluation subject.
Frost & Sullivan Limited independently forecasted and projected the future cash flows of the Target
Company based on its evaluation of the Target Company's operating metrics and financial
performance and by discounting these cash flows at an appropriate discount rate, and all forecasts
in relation to the Target Company (including its cash flows, earnings, profits and business) used in
the DCF analysis and/or referred to in the Summary Valuation Letter or the Valuation Report were
not provided or endorsed by the Company or the Target Company. Frost & Sullivan Limited hasleveraged the Target Company's historical operating and financial performance as disclosed in the
Circular, specifically the historical operating metrics (namely, MAU, Spend Rate and ARPPU) andthe development plans of the Target Company for each of its business segments. Furthermore, as
the relevant financial information is available for each business segment, Frost & Sullivan Limited
is able to understand and analyse each business segment and model the financial forecast
accordingly.
7.2 DCF Approach Model General Assumptions
Frost & Sullivan Limited has made the following general key valuation assumptions in the income
approach valuation exercise:x

Unless otherwise specified in this letter, abnormal factors that may affect the assessedvalue, such as existing or potential mortgages, guarantees, and unique transaction
methods, have not been considered.

x

There have been no significant changes in the current relevant laws and policies, industrial
policies, and the national macroeconomic situation.

x

The political, economic, and social environment in the region where the assessed subject
is located has remained stable, and there have been no significant adverse impacts caused
by uncontrollable and unforeseeable factors.

x

There have been no major changes in taxation policies, tax rates, and other policies
applicable to the assessed subject, and the credit policies, interest rates, and exchange
rates have remained relatively stable.

x

Our valuation is based on various assumptions with respect to 17LIVE, including its present
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APPENDIX M: SUMMARY VALUATION LETTER
and future financial condition, business strategies and the operating environment. Theseassumptions are based on the information provided to us and our discussions with 17LIVE,reflecting our current expectations and views regarding future events, and therefore
necessarily involve known and unknown risks and uncertainties.
x

The estimates of earnings and cash flow data, to the extent they relate to the future, reflect
Frost & Sullivan Limited’s expectations as to the future prospects of 17LIVE and are solely
used in our valuation analysis and are not intended for use as forecasts or projections of
future operations.

x

Furthermore, there will usually be differences between estimated and actual results
because events and circumstance may, or often do not occur as expected and thosedifferences may be material. To the extent that our conclusions are based on forecasts, we
express no opinion on the achievability of these forecasts.

7.3 DCF Approach Model Key Assumptionsx

Revenue - Liver Livestreaming Segment: Frost & Sullivan Limited integrated
independent industry research and forecasted the Target Company's core operating
metrics in Japan and Taiwan markets, including MAU, spend rate, and ARPPU. The MAU
is expected to rebound following the Target Company's adjustments in marketing strategies,aligning with the market growth trends. Currently, the Target Company's spend rate isrelatively high and is expected to show a tendency towards normalization, experiencing aslight decrease in the future. The historical period ARPPU in the Taiwan region is relatively
high and is expected to decline in the future. Meanwhile, the Japan region's ARPPU is
expected to moderately increase along with macroeconomic growth.

xRevenue - V-Liver Livestreaming Segment: Frost & Sullivan Limited primarily
considered two categories: proprietary channels and organic channels. Regarding theorganic channel revenue projection, Frost & Sullivan Limited estimated the Target
Company’s potential new V-Liver quantity and average revenue contribution based on
the Target Company’s current situation, historical data, industry data, andmacroeconomic analysis. For the proprietary channel revenue and testing, Frost &Sullivan Limited estimated the potential new IP quantity and average revenue
contribution by considering the Target Company’s current situation, historical data,industry data, and macroeconomic analysis.

x

Other key items:o Annual Cost of Goods Sold: 60.8% of revenue
o Annual Depreciation and Amortization Rate: assumed 3.3% of PP&E andintangible asseto Tax rate: assumed 25% effective tax rateo Annual Capital Expenditure Rate: 1% of incremental revenue

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APPENDIX M: SUMMARY VALUATION LETTER
7.4 Summary of DCF Approach Valuation Results
Frost & Sullivan Limited has assumed the following assumptions in deriving the present value of
future cash flows:x
x

WACC of 8.8% - 9.2% with midpoint of 9.0%
Perpetual growth rate of 3.8%-4.2% with midpoint of 4.0%

Valuation summary (USD Million)

Present Value of Free Cash Flow
(2023H2 E – 2027E)

103.4

Present Value of Perpetual Cash Flow

573.5

Enterprise value

676.9(+) Net cash

36.5

Equity value

713.4

7.5 DCF Valuation Sensitivity Test
Assuming WACC of 8.8% to 9.2% and perpetual growth rate of 3.8% to 4.2%, the implied equity
value based on DCF is US$666.0 million to US$769.0 million, with sensitivity analysis as shown
below:

8. Declaration and Limiting Conditions:
We are not expressing an opinion on the commercial merits and structure of the Proposed
Business Combination and accordingly, the Report does not purport to contain all the informationthat may be necessary or desirable to fully evaluate the commercial or investment merits of the
Proposed Business Combination by the shareholders of VTAC. The assessment of the commercial
and investment merits of the Proposed Business Combination is solely the responsibility of the
Directors.
We have not had regard to any general or specific investment objectives, financial situation orindividual circumstances of any investor. The Valuation Report and this Letter does not constitute
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APPENDIX M: SUMMARY VALUATION LETTER
and cannot be construed as an advice, a recommendation, or any form of judgement or opinion to
any person in connection with the Proposed Business Combination. Such person or prospective
investors of VTAC should seek his/her own professional advice in connection with the Proposed
Business Combination.
Our scope of work does not require us to express, and we do not express a view on the prospectsof the Target Company. We are therefore not expressing any views on the future trading price ofthe shares or the financial condition of VTAC upon completion of, inter alia, the Proposed Business
Combination.
Our terms of reference do not require us to provide specific advice on legal, regulatory, accounting,property or taxation matters and where specialist advice has been obtained by VTAC and/or theTarget Company and made available to us, we have considered and, where appropriate, relied
upon such advice.
Our independent opinion on the estimate of the market value of the Target Company will not forma basis of the price at which the Target Company is to be acquired. The Valuation Report and thisLetter and the data on which the Valuation Report and this Letter is prepared is not intended toform the basis of any acquisition decision in relation to the Proposed Business Combination anddoes not contain all the information that is necessary to fully evaluate the Proposed Business
Combination.
Our valuation is based on the prevailing market, economic, industry, monetary and other conditions
and on the information made available to us as of the date of this Letter and the Valuation Report.
We assume no responsibility to update, revise or reaffirm our evaluation or assumptions set out in
the Report to reflect events or developments subsequent to the date of this Letter and the Valuation
Report.
All forecasts and/or financial projections in relation to the Target Company (including its cash flows,
earnings, profits and business) made and/or referred to in this Letter and the Valuation Reportwere independently derived by Frost & Sullivan Limited, and none of these forecasts and/or
financial projections are/were provided or endorsed by the Company or the Target Company.
We are not a member of a professional business valuation body or authority and is not registered with
the Institute of Valuers and Appraisers, Singapore ("IVAS") as a Chartered Valuer and Appraiser. We
are not required to be a member of a professional business valuation body or association, or
regulated by any valuation industry related authority. Notwithstanding the above, our independentvaluation has been performed in line with recognised valuation standards (such as the International
Valuation Standards). We have also complied with the disclosure requirements under Practice Note 2(Minimum Disclosure Requirements for Summary Valuation Letters) issued by IVAS in the preparationof this Letter and the Valuation Report.

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APPENDIX M: SUMMARY VALUATION LETTER
9. Sources of Information:
As part of our due diligence, we relied upon documents supplied by 17LIVE, including but notlimited to the following:
1. Latest shareholder circular, which was verified by relevant parties
2. Independent auditor’s report and audited consolidated financial statements of the Target
Company for the financial years ended 31 December 2020, 2021, and 2022.
3. Interim consolidated financial statements of the Target Company for the six-month period
ended 30 June 2023
4. Public filings and market trading data of selected peers
We planned and performed our valuation so as to obtain all the information and explanations which
we considered necessary in order to provide us with sufficient evidence to express our opinion on
the subject asset. In the course of our valuation, we held discussions with the management of
17LIVE concerning the history and current conditions of the business, financial and general outlookof the Target Company. We assumed that the data we obtained in the course of the valuation,
along with the opinions and representations provided to us by the companies are true and accurate.
We have, however, made reasonable enquiries and exercised our judgment on the reasonable useof such information and representations (as deemed necessary) provided to us, and have foundno reason to doubt the accuracy or reliability of such information or representations which we haverelied on. We also used financial and other information obtained from private and public sources.
These sources are considered to be reliable and therefore, we assume no liability for the truth or
accuracy of any data, opinions or estimates furnished by others that have been used in thisanalysis. Frost & Sullivan Limited has assumed that the business continues normally without any
disruptions due to statutory or other external/internal occurrences.
Yours faithfully,
For and on behalf of
Frost & Sullivan Limited

Ch (Eric)
Chen(E i ) CHEN
Executive Director

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