Intermediate Securities Distribution :: Mandatory

LIFEBRANDZ LTD.

(Incorporated in Singapore) (Company Registration No. 200311348E)

1. PROPOSED CONSOLIDATION OF EVERY FIFTY (50) EXISTING ORDINARY SHARES IN THE CAPITAL OF THE COMPANY INTO ONE (1) ORDINARY SHARE
2. PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS CUM WARRANTS ISSUE

1. INTRODUCTION

2. The Board of Directors (the "Board") of Lifebrandz Ltd. (the "Company" and together with its subsidiaries, the "Group") wishes to announce that subject to and conditional upon approval from Shareholders (as defined below) being obtained for the Proposed Rights cum Warrants Issue (as defined below), the Company is proposing to undertake a share consolidation exercise (the "Proposed Share Consolidation") pursuant to which the Company will consolidate every fifty (50) existing ordinary shares ("Shares") in the capital of the Company into one (1) ordinary share ("Consolidated Share"). Accordingly, under the Proposed Share Consolidation, every fifty (50) Shares registered in the name of each shareholder of the Company ("Shareholder") as at the books closure date to be determined by the Directors in their absolute discretion as they deem fit ("Share Consolidation Books Closure Date"), will be consolidated into one (1) Consolidated Share.

3. The Board also wishes to announce that subject to and conditional upon the completion of the Proposed Share Consolidation, the Company is proposing a renounceable non-underwritten rights cum warrants issue of up to 122,400,000 new Shares ("Rights Shares") at an issue price of S$0.025 for each Rights Share ("Issue Price"), with up to 122,400,000 free detachable warrants ("Warrants"), each Warrant carrying the right to subscribe for one (1) new Share ("Warrant Share") at an exercise price of S$0.05 for each Warrant Share ("Exercise Price"), on the basis of two (2) Rights Share for every one (1) existing Share (adjusted for the Proposed Share Consolidation), held by Shareholders as at a time and date to be determined by the Directors for the purpose of determining the Shareholders' entitlement ("Rights Issue Books Closure Date"), fractional entitlements to be disregarded

   ("Proposed Rights cum Warrants Issue"). For the avoidance of doubt, the Rights Issue Books Closure Date will fall on a date after the completion of the Proposed Share Consolidation.

4. THE PROPOSED SHARE CONSOLIDATION

5. Details of the Proposed Share Consolidation

6. As at the date of this announcement, the Company has an issued share capital of S$55,086,000 divided into 3,060,000,000 Shares. Following the Proposed Share Consolidation, the Company will have an issued share capital of S$55,086,000 divided into approximately 61,200,000 Consolidated Shares. The number of Consolidated Shares which Shareholders will be entitled to pursuant to the Proposed Share Consolidation, will based on

   their holdings of the Shares as at the Share Consolidation Books Closure Date, and will be rounded down to the nearest whole Consolidated Share and any fractions of Consolidated Shares arising from the Proposed Share Consolidation will be disregarded. All fractional entitlements arising from the implementation of the Proposed Share Consolidation will be dealt with in such manner as the Directors may, in their absolute discretion, deem fit in the interests of the Company, including (i) disregarding, or (ii) aggregating and selling the same and retaining the net proceeds for the benefit of the Company.

7. Each Consolidated Share shall rank pari passu in all respects with each other, and will be traded in board lots of one hundred (100) Consolidated Shares.

8. The Proposed Share Consolidation will not involve the diminution of any liability in respect of unpaid capital or the payment to any Shareholder of any paid-up capital of the Company, and has no effect on the shareholders' funds of the Group.

9. Shareholders are not required to make any payment to the Company in respect of the Proposed Share Consolidation. The Proposed Share Consolidation will not cause any changes to the percentage shareholding of each Shareholder in the Company, other than non-material changes due to rounding.

10. Subject to Shareholders' approval being obtained for the Proposed Share Consolidation at an extraordinary general meeting ("EGM") to be convened by the Company, Shareholders' holdings of the Consolidated Shares arising from the Proposed Share Consolidation will be ascertained on the Share Consolidation Books Closure Date.

11. Rationale for the Proposed Share Consolidation

12. For the past six (6) calendar months prior and up to the date of this announcement, the absolute price of the Shares traded had been at a low level in the range between S$0.001 and S$0.006.

13. As share trading may involve certain minimum fixed expenses (such as minimum brokerage fees), low traded Share prices translate to higher transaction costs, relative to the trading price, for each trading of one (1) board lot of Shares. The Board believes that with the implementation of the Proposed Share Consolidation, Shareholders should be able to execute trades in larger sizes due to the theoretical higher trading price of each Consolidated Share and this should reduce the transaction costs for Shareholders when dealing in the Consolidated Shares.

14. In addition, in terms of investment risk, low-priced securities may be more susceptible to speculation and market manipulation and share price volatility. Hence, the theoretical higher trading price of each Consolidated Share may reduce such risk.

15. Shareholders should note, however, that there is no assurance that the Proposed Share Consolidation will achieve the desired results set out above nor is there assurance that such results (if achieved) can be sustained in the longer term.

16. Approvals and Conditions

17. The implementation of the Proposed Share Consolidation is subject to Shareholders' approval by way of an ordinary resolution at the EGM.

18. An application will be made through the Sponsor to the SGX-ST for the dealing in, listing of and quotation of the Consolidated Shares pursuant to the Proposed Share Consolidation on the SGX-ST. An appropriate announcement on the outcome of the application will be made in due course.

1. DETAILS OF PROPOSED RIGHTS CUM WARRANTS ISSUE

2. Principal terms of the Proposed Rights cum Warrants Issue
3. Basis of Provisional Allotment. The Proposed Rights cum Warrants Issue is proposed to be made on a renounceable basis to Entitled Shareholders (as defined below) on the basis of two (2) Rights Share, with one (1) detachable Warrant, for every one (1) existing Share, as at the Rights Issue Books Closure Date, fractional entitlements to be disregarded.
4. Issue Price and Exercise Price. The proposed Issue Price of S$0.025 for each Rights Share represents a discount of approximately 75% to the closing market price of Shares as at 23 January 2017, being the last trading day prior to the date of this announcement on which Shares were traded, adjusted for the Proposed Share Consolidation, and a discount of approximately 50% to the theoretical ex-rights price of Shares, adjusted for the Proposed Share Consolidation. The proposed Exercise Price of S$0.05 for each Warrant Share represents a discount of approximately 50% to the closing market price of the Shares as at 23 January 2017, being the last trading day prior to the date of this announcement on which Shares were traded, and is the theoretical ex-rights price of the Share, adjusted for the Proposed Share Consolidation.
5. Form and Subscription Rights of the Warrants. Up to 122,400,000 Warrants will be issued in registered form and will be subject to the terms and conditions to be set out in an instrument by way of a deed poll constituting the Warrants ("Deed Poll"). The Warrant will carry the right to subscribe for one (1) Warrant Share at the Exercise Price of S$0.05 for each Warrant Share at any time during the period commencing on and including the date falling 12 months from the date of issue of the Warrants and expiring at 5:00 pm on the date immediately preceding 24 months from the date of the issue of the Warrants ("Exercise Period"), unless such date is a date on which the register of members of the Company ("Register of Members") is closed or is not a day on which Catalist is open for securities trading ("Market Day"), in which case the Exercise Period shall end on the date prior to the closure of the Register of Members of the Company or the immediate preceding Market Day, as the case may be, but excluding such period(s) during which the register of holders of Warrants may be closed pursuant to the terms and conditions of the Warrants as set out in the Deed Poll. The Warrants which have not been exercised after the date of expiry shall lapse and cease to be valid for any purpose.
6. Detachability and Trading of the Warrants. The Warrants are immediately detachable from the Rights Shares upon issue, and will be issued in registered form and will be listed and traded separately on Catalist under the book-entry (scripless) settlement system, upon the listing and quotation of the Warrants on Catalist, subject to, amongst others, there being an adequate spread of holdings of the Warrants to provide for an orderly market in the Warrants.
7. Eligibility of Shareholders to participate in the Proposed Rights cum Warrants Issue. The Company proposes to provisionally allot Rights Shares with Warrants to all the "Entitled Shareholders", comprising Entitled Depositors and Entitled Scripholders (both as defined herein).
8. Entitled Depositors. Shareholders whose Shares are registered in the name of the Central Depository (Pte) Limited ("CDP") and whose securities accounts with CDP are credited with Shares as at the Rights Issue Books Closure Date ("Depositors") will be provisionally allotted their entitlements on the basis of the number of Shares standing to the credit of their securities account with CDP as at the Rights Issue Books Closure Date. To be "Entitled Depositors", Depositors must have registered addresses with CDP in Singapore as at the Rights Issue Books Closure Date or must have, at least five (5) Market Days prior to the Rights Issue Books Closure Date, provided CDP with addresses in Singapore for the service of notices and documents.
9. Entitled Scripholders. Duly completed and stamped transfers (in respect of Shares not registered in the name of CDP) together with all relevant documents of title received up to the Rights Issue Books Closure Date by Tricor Barbinder Share Registration Services (a division of Tricor Singapore Pte. Ltd.) ("Share Registrar"), will be registered to determine the provisional entitlements of the transferee ("Scripholder"), which term shall include a person who is registered as a holder of Shares and whose share certificates are not deposited with CDP) under the Proposed Rights cum Warrants Issue. To be "Entitled Scripholders", Scripholders must have registered addresses in Singapore as at the Rights Issue Books Closure Date or must have, at least five (5) Market Days prior to the Rights Issue Books Closure Date, provided the Share Registrar with addresses in Singapore for the service of notices and documents.
10. Foreign Shareholders. For practical reasons and in order to avoid violation of relevant securities legislation applicable in countries other than Singapore, the Proposed Rights cum Warrants Issue is only made in Singapore and the Rights Share and Warrants will not be offered to Shareholders with registered addresses outside Singapore as at the Rights Issue Books Closure Date and who have not at least five (5) market days prior to the Rights Issue Books Closure Date, provided to the Company, the CDP or the Share Registrar, as the case may be, addresses in Singapore for the service of notices and documents ("Foreign Shareholders"). The Offer Information Statement (to be set out in detail below) to be issued for the Proposed Rights cum Warrants Issue and its accompanying documents will not be mailed outside Singapore. Accordingly, no provisional allotments of the Rights Shares or the Warrants will be made to Foreign Shareholders and no purported acceptance thereof or application will be valid.

Entitlements to Rights Shares or the Warrants which would otherwise accrue to Foreign Shareholders will, at the sole and absolute discretion of the Company, be sold "nil-paid" on Catalist after dealings in the provisional allotments of Rights Shares and the Warrants commence. In exercising its discretion, the Company may consider, amongst other things, whether a premium can be obtained from such sales, after taking into account expenses to be incurred in relation thereto. The net proceeds from all such sales, after deduction of all expenses therefrom, will be pooled and thereafter distributed to Foreign Shareholders in proportion to their respective shareholdings as at the Rights Issue Books Closure Date and sent to them at their own risk by ordinary post, where the amount of net proceeds to be distributed to any single Foreign Shareholder is not less than S$10.00. In the event the amount is less than S$10.00, the Company shall be entitled to retain or deal with such net