TOMO : UPDATE ON EXPECTED TIMELINE FOR USE OF PROCEEDS AND CHANGE IN USE OF PROCEEDS

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TOMO Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6928)

UPDATE ON EXPECTED TIMELINE FOR

USE OF PROCEEDS AND CHANGE IN USE OF PROCEEDS

References are made to the section headed "Future plans and Use of Proceeds" in the prospectus of the TOMO Holdings Limited (the "Company", together with its subsidiaries, the "Group") dated 30 June 2017 (the "Prospectus"), the sections headed "Management Discussion and Analysis - Use of proceeds" in the annual report of the Company for the year ended 31 December 2019 (the "2019 Annual Report"), and an announcement of the Company dated 17 July 2020 in relation to, among others, update on expected timeline for use of proceeds (the "Announcement"). Unless otherwise defined, capitalised items used in this announcement shall have the same meanings as those defined in the Prospectus, the 2019 Annual Reports and the Announcement, respectively.

The Board would like to provide an update to the use of the proceeds from the Listing as supplemental information to the 2019 Annual Report and the Announcement on update on expected timeline for use of proceeds.

UPDATE ON EXPECTED TIMELINE FOR USE OF PROCEEDS

As disclosed in the Announcement, the remaining net proceeds of the Listing (after deducting underwriting fee and the relevant expenses payable by the Group in connection to the Listing) amounted to approximately S$2.64 million as of 30 June 2020.

As of 31 December 2020, a total amount of approximately S$7.98 million out of the net proceeds of the Listing had been utilised by the Group according to the allocation set out in the Prospectus and the remaining net proceeds of the Listing amount to approximately S$2.32 million.

In accordance with the requirements of paragraph 11(8) of Appendix 16 to the Listing Rules, the table below is a summary of the Group's use of proceeds of the Listing up to 31 December 2020 (including additional information on the expected timeline of the full utilisation of the balance of such proceeds). The Board would like to announce that the Board has resolved to change the use of remaining proceeds from the Listing with an updated expected timeline of full utilisation as follows:

Planned

use of net proceeds from the Listing Date to 31 December 2020 $'000

Actual utilisedUnutilisedamount net proceedsRevisedup to 31 December 2020 $'000

as at 31 allocation ofDecemberunutilised

2020 net proceedsUpdated expected timeline of full utilisation of the balance

$'000

$'000

Upgrade existing facilities, acquire new machinery and premises Strengthen our sales and marketing efforts Expand our product offerings

5,160 1,760 1,430

4,160 1,010 1,430

1,000 End of 2022

1,000

750 -

750 End of 2022

• - -

  Upgrade and integrate of our information technology system Working capital and general corporate

  920 1,030 10,300

  350 1,030 7,980

  570 - 2,320

• - -

570 End of 2022 2,320

We are facing even greater headwinds. Yield curves are flattened or inverted, as we witness vast geopolitical uncertainty and tensions across the world. Barriers to free trade punish businesses with global supply chains, and the COVID-19 is ravaging across continents. These events have brought forth the spectre of recession to the global market, and we must be prepared for the downturn of economy that will inevitably follow.

We have setup the product display booths within our customers' workshops and service centres. We have sufficient technicians to provide additional aftersales services and installation of new products other than newly registered car. With the current market situation, we are in opinion to defer the renovation of the newly purchased properties as showroom, workshop and warehouse. We will renovate the existing showroom and warehouse by end of 2021.

We will also extend the sales and marketing efforts by introducing more advertisements and brand awareness campaigns over the years 2021 and 2022.

The Directors will from time to time assess the business objectives and the use of the net proceeds for the Group's benefit to cope with the changing market conditions. If there is any material progress on the utilisation under the time frame as set out above, or in case any further adjustments on the use of the net proceeds are needed, the Company will make further announcement as and when appropriate.

REASONS FOR AND BENEFITS OF THE CHANGE IN USE OF PROCEEDS

The outbreak of COVID-19 has been rapidly evolving globally and has significantly impacted the global economic. In light of these uncertainties and the market conditions, the Group's operation and financial performance may be materially and adversely affected. Accordingly, the Group needs to adopt a more effective policy to maintain its existing business operations and cash flow liquidity.

The re-allocation of the net proceeds in an amount of approximately S$570.000, which were originally allocated for upgrade and integrate of our information technology system, to supplement the working capital and general corporate is more beneficial to meet the operation needs of the Company and increase its financial effects.

We had upgraded existing servers and implement a new ERP system, electronic documentation and cloud back up storage, migrated accounting record to new ERP system and implemented automated payroll system, point of sale system and fixed assets management system and also implemented mobile job order system and warehouse and inventory tracking system since July 2017. We managed to complete the upgrade and implementation at a cost lower than that estimated as at the date of the Prospectus with the financial supports from Singapore Government Grants.

The Board believes that the reallocation of the unutilised net proceeds as disclosed above will enable a better utilisation of the net proceeds as this will provide higher level of flexibility for the Group to manage its asset and liability against the current unstable business environment and is favourable to the Group's long term business development. The Board will continue to assess the impact of the COVID-19 pandemic and the economic trend of Singapore on the operations of the Group.

The Board confirms that there is no material change in the business nature of the Group as set out in the Prospectus and considered that the proposed change in use of proceeds will not have any material adverse impact on the operations of the Group and is in the best interests of the Company and its shareholders as a whole.

By Order of the Board of TOMO HOLDINGS LIMITED

Siew Yew Khuen Chairman and Chief Executive Officer

Hong Kong, 19 March 2021

As at the date of this announcement, the executive Directors are Mr. Siew Yew Khuen, Ms. Lee Lai Fong, Mr. Siew Yew Wai and Mr. Zha Jianping; and the independent non-executive Directors are Mr. Clarence Tan Kum Wah, Mr. Gary Chan Ka Leung and Mr. Ng Chee Chin.