INTRODUCTION

We refer to the Company’s announcements from 19 January 2018 to 2 January 2020 (“Announcements”) in respect of Practice Note 17 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

The Board of Directors of APFT (“Board”) wishes to announce that the Company has on 9 January 2020 entered into a memorandum of understanding (“MOU”) with QEOS LED Sdn Bhd (Registration No.: 201001013456 (897687-A)) (“QEOS LED”) or the “Vendor”), the shareholder of QEOS Energy Sdn Bhd (“QEOS Energy”) to negotiate in good faith with a view of entering into a definitive sale and purchase agreement (“SPA”) for the acquisition by APFT of the entire equity interest of QEOS Energy (“Proposed Acquisition”) and the other key proposals to be implemented under the Proposed Regularisation Plan (as defined herein). The proposed regularisation plan would involve, inter-alia, the Proposed Acquisition and other key proposals including a fund raising exercise (“Proposed Regularisation Plan”).

The Company and the Vendor are each referred to as the “Party” and collectively referred to as the “Parties”.

BACKGROUND INFORMATION ON QEOS ENERGY AND THE VENDOR

1. QEOS ENERGY QEOS Energy is principally involved in the assembling, manufacturing, distributing, supplying of solar energy systems products and supplying light-emitting diode (“LED”) lighting systems. As at 8 January 2020, being the latest practicable date prior to this announcement (“LPD”), QEOS Energy had an issued share capital of RM500,000 comprising 500,000 ordinary shares. QEOS Energy is a wholly-owned subsidiary of the Vendor. The directors of QEOS Energy are Gabriel Anak Walter and Mohd. Ghazali Bin Mahmood.

2. VENDOR The Vendor is principally involved in the assembling, manufacturing, distributing and supplying energy efficient LED lighting systems. As at the LPD, the Vendor had an issued share capital of RM3,084,977.56 comprising 850,000 ordinary shares of RM0.10 per share and 141,642 preference shares of RM21.18 per share. The ordinary shares are held by QEOS Pte. Ltd. and the preference shares are held by Pitch Nominees Sdn Bhd. The directors of the Vendor are Mohd. Ghazali Bin Mahmood, Lam Poh Lian, Siti Rubiah binti Ngadiman and Faridah binti Omar Shah.

SALIENT TERMS OF THE MOU

The MOU is not intended to be a legally binding agreement and is meant only to serve as a statement of intention of the Parties to the MOU.

The MOU sets out the intention of the Parties to negotiate in good faith with a view of entering into the SPA and all other key terms of the Proposed Regularisation Plan. The Parties agree that the MOU shall not be tantamount to a disposal and transfer of the entire equity interest of QEOS Energy and the SPA shall be executed.

The salient terms of the MOU are set out below:

1. the Parties have agreed and shall provide all such information and documents as may be required by either Party hereto and their appointed advisers for the purposes of conducting a thorough legal and financial due diligence on QEOS Energy;

   (ii) with effect from the date of execution of the MOU, the Parties have agreed to co-operate exclusively with each other with respect to the Proposed Regularisation Plan. The MOU shall be terminated and ceased to have effect upon execution of the SPA, unless terminated earlier in writing by either Party hereto;

   (iii) the MOU shall become effective for a period of 6 months from the date of the MOU, during which the SPA in relation to the Proposed Regularisation Plan will be finalised and executed; and

   (iv) the conditions precedent of the Proposed Regularisation Plan shall include but not limited to the Parties acknowledging that the SPA and other proposals to be implemented under the Proposed Regularisation Plan shall be subject to inter-alia the approvals of the Securities Commission Malaysia, Bursa Securities and/or other regulatory authorities.

RATIONALE OF THE MOU

The MOU allows the Parties to negotiate exclusively for at least a period of 6 months and sets out the understanding and intention in respect of the Proposed Regularisation Plan. The Proposed Acquisition is part of the Company’s regularisation plan to regularise the Company’s PN17 condition and maintain its listing status on the Main Market of Bursa Securities. Details of the Proposed Regularisation Plan will be announced and submitted to the regulatory authorities for their approvals upon finalisation of the Proposed Regularisation Plan.

For avoidance of doubt, the Company is required to submit the Proposed Regularisation Plan to the regulatory authorities for their approval before 18 January 2020.

FINANCIAL EFFECTS

The MOU is not expected to have any material effects on issued share capital and substantial shareholders’ shareholdings of the Company, the net assets, gearing, the earnings and earnings per share of the APFT Group.

The effects on the issued share capital, substantial shareholders’ shareholdings, financial position in respect of the net assets and gearing ratio of APFT as well as earnings level of APFT cannot be determined at this juncture as the terms of the Proposed Regularisation Plan which include, amongst others, the purchase consideration and the mode of settlement for the Proposed Acquisition have yet to be agreed and finalised.

The above information will be announced immediately upon the execution of the SPA in relation to the Proposed Regularisation Plan.

INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the directors, major shareholders of APFT and/or persons connected with them have any interest, direct or indirect, in the MOU.

DIRECTORS’ STATEMENT

The Board, after taking into consideration all aspects of the MOU, is of the opinion that the MOU is in the best interest of the Company.

PRINCIPAL ADVISER

The Principal Adviser for the Proposed Regularisation Plan will be appointed in due course.

DOCUMENT AVAILABLE FOR INSPECTION

A copy of the MOU is available for inspection at the registered office of APFT at Unit 1119 (Entrance 5), 11th Floor, Block A, Damansara Intan, No. 1, Jalan SS 20/27, 47400 Petaling Jaya, Selangor Darul Ehsan during normal office hours (except for Saturday, Sunday and public holidays) for a period of 3 months from the date of this announcement.

A detailed announcement on the Proposed Regularisation Plan will be made upon finalisation of the terms and conditions of the Proposed Regularisation Plan and execution of the SPA.

This announcement is dated 9 January 2020.