(“Directors”) of Equation Corp Limited (“Company”) wishes toSubscription Agreement”) with Asdew Acquisitions Private Limited andSubscribers”) for the issue andSubscription Shares”) on the termsSubscription Price”). The total consideration for the Subscription is S$1.998 millionTotal Consideration”)

2. PROPOSED SUBSCRIPTION

2.1 Principal terms of the Proposed Subscription

Under the terms of the Subscription Agreement and subject to the conditions precedent

contained therein, the Subscribers agreed to subscribe for and the Company agreed to

allot and issue to the Subscribers the Subscription Shares at the Subscription Price.

The Subscription Price amounts to a discount of approximately 10% to the volume

weighted average price of S$0.015 of the ordinary shares of the Company (the “

traded on the Catalist Board of the SGX-ST (“

being the full market day immediately preceding the date of execution of the Subscription

Agreement.Shares”)SGX Catalist”) on 21 February 2013,

Save for the above, there are no unissued shares of the Company under option as at the end of the financial year.- Equation Executives' Share Option Scheme (" ESOS" )

C) Treasury shares

No treasury shares were held by the Company as at 31 December 2012, 30 June 2012 and 31 December 2011.

D) Exchangeable loans and convertible loans

The convertible loans are convertible at the lenders option into 412,499,926 (31 December 2011: Nil) ordinary shares of the Company (refer 1(b)(ii)).

1(d)(iii)

1(d)(iv)

The Company does not have any treasury shares.

2. Whether the figures have been audited or reviewed, and in accordance with which auditing standard or practice.

The figures have not been audited nor reviewed by our auditors.

3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of a matter).

The figures have not been audited nor reviewed by our auditors.

The issued share capital of the Company as at 31 December 2012 comprises 3,713,539,272 (30 June 2012: 2,475,692,848, 31 December 2011: 2,259,111,653) ordinary shares.

Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity

securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may

be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury

shares of the issue, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.

As at 31 December 2012, there were ESOS outstanding for the subscription of 2,600,000 (30 June 2012: 2,600,000, 31 December 2011: 4,100,000) ordinary shares in the share capital of the Company.

On 25 July 2012, the Company issued and allotted 1,237,846,424 new shares pursuant to a renounceable, non-underwritten rights issue (" Rights Issue" ) in the capital of the Company (“Rights Shares”) at

an issue price of $0.012 for each Rights Share, on the basis of one (1) Rights Share for every two (2) existing shares held by entitled shareholders.