Asset Acquisitions and Disposals::PROPOSED ACQUISITION OF REMAINING 49.0% INTEREST IN SUBSIDIARY, CORNERSTONE ASIA HEALTH PTE. LTD.

T (65) 6581 7388 F (65) 6581 5388

www.asianhealthcare.com.sg

ASIAN HEALTHCARE SPECIALISTS LIMITED

(Incorporated in the Republic of Singapore)

(Company Registration No. 201727543R)

PROPOSED ACQUISITION OF THE REMAINING 49.0% INTEREST IN THE COMPANY'S

SUBSIDIARY, CORNERSTONE ASIA HEALTH PTE. LTD.

1. INTRODUCTION
   The board of directors (the "Board" or the "Directors") of Asian Healthcare Specialists Limited (the "Company", and together with its subsidiaries, the "Group") refers to the announcement made by the Company on 9 April 2021 (the "Previous Announcement") and wishes to announce that the Company has on 30 June 2021 entered into a sale and purchase agreement ("SPA") with the other shareholders1 of the Company's subsidiary, Cornerstone Asia Health Pte. Ltd. ("CAH") (the "Vendors") in relation to the proposed acquisition by the Company of 33,495,379 issued and fully- paid ordinary shares representing the remaining 49.0% of the issued and paid-up share capital ("Sale Sales") in CAH (the "Proposed Acquisition").
   Unless otherwise defined herein, all capitalised terms used in this announcement shall have the same meaning ascribed to them in the Previous Announcement.
2. INFORMATION ON THE PROPOSED ACQUISITION

2.1 Information on CAH Group and the Vendors

CAH was incorporated in Singapore on 28 June 2017, and is a company limited by shares, with a share capital of S$35,825,848.19 comprising 68,357,917 issued and fully paid-up ordinary shares which are held by the Company and the Vendors in the following proportion:

Shareholders of CAH	Number of ordinary shares	Percentage of shares to
	held in CAH	total issued capital (%)
Asian Healthcare Specialists	34,862,538	51.00
Limited
Dr. Ng Tay Meng	5,623,728	8.23
Dr. Seah Sheng Heang Geoffry	2,825,011	4.13
Dr. Khoo Shih Wee @ Lawrence	6,529,826	9.55
Khoo
Dr. Ho Siew Hong	8,391,042	12.28
Dr. Cheng Ching Li, Bobby ("Dr.	10,125,772	14.81
Cheng")
Total	68,357,917	100.00

• Dr. Ng Tay Meng, Dr. Seah Sheng Heang Geoffry, Dr. Khoo Shih Wee @ Lawrence Khoo, Dr. Ho Siew Hong, Dr. Cheng Ching Li, Bobby.

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The principal activities of the CAH and its subsidiaries (the "CAH Group") lie in the provision of multidisciplinary healthcare services across different specialisations, offering key services in ophthalmology, urology, dermatology and gastroenterology as well as family medicine. The CAH Group's operations in the five (5) medical disciplines comprise eight (8) specialists and family medicine clinics that are founded by doctors who each have over 20 years of experience in their respective fields.

Among the Vendors are five of the specialists and medical doctors referred to in the paragraph above namely, Dr. Ng Tay Meng, Dr. Khoo Shih Wee @ Lawrence Khoo, Dr. Ho Siew Hong, Dr. Cheng and Dr. Seah Sheng Heang Geoffry. As at the date hereof, the Vendors hold in aggregate 49.0% in CAH, of which Dr. Cheng holds 14.81% in CAH.

2.2 Certain Financial Information of CAH Group

Based on CAH Group's unaudited consolidated financial statements for the 6 months ended 31 March 2021, CAH Group's net profit after tax was S$2,964,000, and its net book value and net tangible assets was S$1,749,000, as at 31 March 2021. Based on CAH Group's unaudited consolidated financial statements for the financial year ended 30 September 2020, CAH Group's net profit after tax was S$4,772,000.

CAH Group's pro forma unaudited consolidated net profit after tax for the 6 months ended 31 March 2021, after adjustments for, inter alia, the employment agreements entered by CAH Group with each of Dr. Ng Tay Meng, Dr. Seah Sheng Heang Geoffry, Dr. Khoo Shih Wee @ Lawrence Khoo, Dr. Ho Siew Hong and Dr. Cheng on 1 May 2021 ("Employment Agreements"), is S$2,120,000. CAH Group's pro forma unaudited consolidated net book value and net tangible assets as at 31 March 2021 was S$905,000. CAH Group's pro forma unaudited consolidated net profit after tax for the financial year ended 30 September 2020, after adjustments for, inter alia, the Employment Agreements, is S$3,711,000.

No independent valuation was conducted on the CAH Group. CAH's operating subsidiaries operate as asset light entities with few tangible assets. Accordingly, the Company had not commissioned an independent property valuation. In arriving at the Consideration (as defined herein), the Company had considered the valuation of similar acquisitions made by other comparable Singapore listed healthcare providers. In addition, the Company had also considered the nature of the CAH Group's business, and that the real value is intrinsic in the reputation and experience of the specialists and medical doctors in the CAH Group. Due to the foregoing, the Company had concluded that an independent business valuation would not be necessary in the context of the Proposed Acquisition. Nevertheless, the Company has appointed Evolve Capital Advisory Private Limited as the independent financial adviser ("IFA") to provide an opinion letter as to whether the Proposed Acquisition, as an interested person transaction, is on normal commercial terms and is not prejudicial to the interests of the Company and its minority Shareholders.

On completion of the sale and purchase of the Sale Shares ("Completion"), the Company will be the sole shareholder holding 100% of the total issued and paid-up share capital of CAH.

3. RATIONALE FOR THE PROPOSED ACQUISITION

The Board is of the opinion that the Proposed Acquisition is in the best interests of the Group and is in line with the Group's business strategies and future plans to invest in management and healthcare professionals as part of its growth and expansion strategy, as outlined in the Offer Document of the Company dated 12 April 2018.

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As a 100% shareholder, the Proposed Acquisition will give the Company full control over CAH Group's healthcare assets and strengthen the ability to align CAH Group's objectives with the Company's long-term strategic goals and align the commitment of the Vendors to grow further together with the Group. The Proposed Acquisition is also expected to enhance the Group's operational efficiency, flexibility, and patient service quality; and add to a larger and deeper integrated healthcare group with a comprehensive suite of enhanced and integrated multi-disciplinary specialist healthcare capabilities that will accelerate the nurturing, attraction, and retention of talent.

The benefits from the Proposed Acquisition will support the Group's vision to become a holistic and multi-disciplinary specialist healthcare provider, generate long-term shareholder value, and enhance the overall profile of the Group to bankers and investors.

4. PRINCIPAL TERMS OF THE PROPOSED ACQUISITION

4.1 Consideration

The consideration ("Consideration") for the Proposed Acquisition is S$16,000,000, which was arrived at on a willing buyer and willing seller basis after arm's length negotiations between the Company and the Vendors, after taking into account, inter alia, valuation of similar acquisitions made by other comparable Singapore listed healthcare providers, the business prospects of the CAH Group and the track record of the specialists and medical doctors in the CAH Group, and the capabilities and synergies between the Company and CAH Group.

The Consideration will be satisfied by the Company as follows:

1. S$2,500,000 in cash ("Cash Consideration") to the Vendors on the completion date under the SPA (the "Completion Date"), which will be funded by the proceeds of the placement of 17,700,000 ordinary shares in the share capital of the Company ("Shares") completed on 26 April 2021; and
2. S$13,500,000 by the issue and allotment of 72,972,973 new Shares to the Vendors (and/or their designated nominees) credited as fully paid up at the issue price of S$0.185 (the "Consideration Shares") on the Completion Date ("Proposed Allotment", together with the Proposed Acquisition, "Proposed Transaction").

Under the terms of the SPA, the Vendors have the right to designate the issuance of up to an aggregate of 364,864 Consideration Shares (out of the total 72,972,973 Consideration Shares) to business associates who have contributed to the success of the CAH Group ("Reserved Consideration Shares"), in proportion to their respective shareholding percentages in the issued share capital of CAH for the time being provided that written notice is given to the Company no later than five (5) business days prior to Completion Date.

The issue price for the Consideration Shares is at premium of 1.65% and 7.25% over the volume weighted average price of S$0.1820 and S$0.1725 for trades done on the Singapore Exchange Securities Trading Limited ("SGX-ST") for the full Market Day on 7 April 2021, being the last full Market Day for which trades were done on the SGX-ST prior to the signing of the Term Sheet and on 30 June 2021, being the last full Market Day for which trades were done on the SGX-ST prior to the signing of the SPA. As at the date hereof, the Consideration Shares represent approximately 15.41% of the existing share capital of the Company and approximately 13.35% of the Enlarged Share Capital (as defined below) of the Company, respectively.

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The Consideration Shares will be allotted and issued pursuant to the specific approval to be obtained from the shareholders of the Company (the "Shareholders") by way of ordinary resolution at an extraordinary general meeting of the Company to be held at such date and time to be announced ("EGM"). Please see paragraph 8 of this announcement below for further details.

The Consideration Shares, when issued and allotted, shall rank pari passu in all respects with the then existing Shares. The Consideration Shares will be issued to the Vendors free from all encumbrances and will carry all rights similar to the existing Shares of the Company, except that they will not rank for any dividend, rights, allotment or other distribution, the record date for which falls on or before the date of issuance and allotment of the Consideration Shares.

The Company will be making an application to the SGX-ST via its continuing sponsor as soon as reasonably practicable after the signing of the SPA for the listing of, and quotation for, the Consideration Shares on the Catalist and will make the necessary announcement(s) upon receipt of the listing and quotation notice from the SGX-ST.

A breakdown of the Cash Consideration and Consideration Shares entitlement to each Vendor pursuant to the SPA is set out below:

Vendor	Cash Consideration	Consideration Shares
	Entitlement (S$)	Entitlement
Dr. Ng Tay Meng	419,739.09	12,251,844
Dr. Seah Sheng Heang Geoffry	210,850.80	6,154,564
Dr. Khoo Shih Wee @ Lawrence Khoo	487,367.68	14,225,867
Dr. Ho Siew Hong	626,283.55	18,280,709
Dr. Cheng	755,758.88	22,059,989
Total:	S$2,500,000	72,972,973

Based on the proposed issuance and allotment of 72,972,973 Consideration Shares pursuant to the Proposed Allotment, the enlarged share capital of the Company will consist of 546,605,998 Shares ("Enlarged Share Capital"). Upon the issuance of the Consideration Shares, the shareholding of Dr. Ng Tay Meng, Dr. Seah Sheng Heang Geoffry, Dr. Khoo Shih Wee @ Lawrence Khoo, Dr. Ho Siew Hong and Dr. Cheng in the Company will be 27,386,455, 13,757,243, 31,798,975, 41,267,103 and 49,310,528, representing 5.01%, 2.52%, 5.82%, 7.55% and 9.02% of the Enlarged Share Capital (and after the allocation of the Reserved Consideration Shares) respectively.

4.2 Conditions Precedent

Completion is subject to certain conditions precedent (the "Conditions Precedent") being satisfied or waived in accordance with the SPA, including, inter alia, the following:

1. there not having been at any time hereafter and until Completion any material adverse change in relation to the affairs, operations, businesses, properties, financial condition (including liabilities, assets and results) and/or prospects of CAH Group;

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1. 1. all the representations and warranties on the part of the Vendors under the SPA being true, accurate and not misleading as at the Completion Date;
   2. the approval of the Shareholders for the Proposed Transaction at the EGM; and
   3. the approval-in-principle of the SGX-ST for the listing of and quotation for the Consideration Shares on Catalist.
2. Completion
   The Completion Date shall be the later of 30 July 2021 or the date falling one (1) business day after the last in time of the Conditions Precedent are satisfied or waived (as the case may be) in accordance with the SPA (or such other date as may be agreed in writing between the Vendors and the Company).
3. Moratorium on the Moratorium Shares Held by the Vendors
   The Vendors have undertaken to the Company in relation to the Consideration Shares excluding the Reserved Consideration Shares ("Moratorium Shares") held by them that they shall not, during the periods as set out below, do or agree to do any of the following acts:
4. 1. sell, contract to sell, offer, realise, transfer, assign, pledge, grant any option to purchase, grant any security over, encumber or otherwise dispose of, any part of the Moratorium Shares;
   2. enter into any transaction or other arrangement, in whole or in part, (including any swap, hedge or derivative transaction) with a similar economic effect to the foregoing, whether such transaction is to be settled by delivery of the Moratorium Shares, in cash or otherwise;
   3. deposit all of their effective interest, in any Moratorium Shares in any depository receipt facility;
   4. enter into a transaction which is designed or which may reasonably be expected to result in any of the above; and
   5. publicly announce any intention to do any of the above,

(collectively, the "Restrictions")

Upon the allotment and issuance of the Moratorium Shares, the Restrictions shall apply to the Vendors as follows:

1. for the first 12-month period after Completion, the Restrictions shall apply to 100.0% of the Moratorium Shares issued to the Vendors;
2. for the second 12-month period after Completion, the Restrictions shall apply to 80.0% of the Moratorium Shares issued to the Vendors;
3. for the third 12-month period after Completion, the Restrictions shall apply to 60.0% of the Moratorium Shares issued to the Vendors;
4. for the fourth 12-month period after Completion, the Restrictions shall apply to 40.0% of the Moratorium Shares issued to the Vendors; and

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