Asset Acquisitions And Disposals :: Proposed Acquisition Of 70% Of The Shares In The Share Capital Of The Green Bar Pte. Ltd.

(Company Registration Number 200311348E) (Incorporated in the Republic of Singapore)

PROPOSED ACQUISITION OF 70% OF THE SHARES IN THE SHARE CAPITAL

OF THE GREEN BAR PTE. LTD.

• 1. INTRODUCTION

• 1.1 The Board of Directors (the "Board" or "Directors") of LifeBrandz Ltd. (the "Company" and together with its subsidiaries, the "Group") refers to the announcement released by the Company on 3 February 2022 ("Previous Announcement").

• 1.2 Further to the Previous Announcement, the Board wishes to announce that:

  • (a) LB Lab Pte. Ltd. ("LB Lab") has on 18 April 2022 entered into a conditional sale and purchase agreement ("SPA") with Ms. Ng Yu-Lynn Lynne Mari ("NYLM"), Mr.

    Sng Ren Yeong ("SRY") and Ms. Lim Ca-Ryn ("LCR" and together with NYLM and SRY collectively, the "Vendors" and each a "Vendor") pursuant to which the Vendors have collectively agreed to sell, and LB Lab has agreed to acquire, in aggregate 210,000 ordinary shares ("Sale Shares") representing 70% of the total enlarged issued and paid-up share capital of The Green Bar Pte. Ltd. ("GBPL") subsequent to GBPL Capitalisation (as defined herein), upon the terms and subject to the conditions in the SPA ("Proposed Acquisition"); and

  • (b) LB Lab has on 18 April 2022 entered into a conditional shareholders' agreement ("SHA") with the Vendors and the Company to record the mutual understanding amongst the shareholders of LB Lab in relation to ownership, management and governance of LB Lab subsequent to completion of the Proposed Acquisition taking place in accordance with the SPA.

• 1.3 Capitalised terms used in this announcement, unless otherwise defined or the context otherwise defined, shall have the definitions ascribed to them in the Previous Announcement.

• 1.4 Upon completion of the Proposed Acquisition, GBPL will become a 70%-owned subsidiary of LB Lab and the Company's shareholding in LB Lab will be diluted from 100% to 75%. Please refer to Appendix B to this Announcement for the shareholdings in GBPL and LB Lab, respectively, before and after completion of the Proposed Acquisition.

• 1.5 The Proposed Acquisition constitutes a "discloseable transaction" under Chapter 10 of Section B: Rules of Catalist of the listing manual ("Catalist Rules") of the Singapore Exchange Securities Trading Limited ("SGX-ST"). Further details of the Proposed Acquisition are set out below.

• 2. INFORMATION ON GBPL AND VENDORS

  The information on GBPL and the Vendors in this Announcement was provided by the Vendors. In respect of such information, the Company and the Board have not

independently verified the accuracy and correctness of the same and the Company's responsibility is limited to the proper extraction and reproduction herein in the context that the information is being disclosed in this Announcement.

• (a) GBPL is a private company limited by shares incorporated in Singapore on 12 January 2010. GBPL is principally engaged in the food and beverage business, in particular the sale of gourmet salads.

• (b) As at the date of this Announcement:

  • (i) the directors of GBPL are NYLM and LCR;

  • (ii) the shareholders of GBPL are as follows:

    Name	Number of Shares in GBPL	Shareholding Percentage in GBPL
    NYLM	43,500	29.0%
    SRY	42,600	28.4%
    LCR	63,900	42.6%
    Total	150,0001	100.0%

  • (iii) none of the directors and shareholders of GBPL are related to any of the Directors, controlling shareholders, chief executive officer of the Company and/or their respective associates; and

  • (iv) none of the directors and shareholders of GBPL holds, directly or indirectly, any shares in the Company.

• (c) As part of the Proposed Acquisition, each of LCR and Ernie Voon Tiq Wei (collectively, the "Key Employees") will be entering into service agreements with LB Lab to be appointed as R&D Business Manager and General Manager, respectively, to inter alia oversee the management and operations of LB Lab and GBPL.

• 3. RATIONALE FOR THE PROPOSED ACQUISITION

• 3.1 The Proposed Acquisition is part of the Company's business strategy to capitalise on growth opportunities. The Board believes that with the gradual easing of the ongoing COVID-19 dining and social gathering restrictions, GBPL has potential for growth and such growth will provide the Company with a potential new income stream and improve its growth prospects. Further, the bulk of the investment is for the Company to fund LB Lab with the Convertible Loan (see paragraph 4.3 below) to extend and expand new GBPL's products and offerings under LB Lab, including the possibility of setting up a cloud kitchen and developing new takeout products. This will eventually enhance the shareholder value. Having considered the terms of the Proposed Acquisition, the Board is of the view that the Proposed Acquisition is in the best interests of the Company.

• 4. DETAILS OF THE PROPOSED ACQUISITION

• 4.1 Principal Terms of the Proposed Acquisition

1

Please note that immediately upon completion of the GBPL Capitalisation, the total number of ordinary shares in GBPL will be 300,000 - see Appendix B below.

• (a) Purchase Consideration

  • (i) The purchase consideration for the Sale Shares is S$17,744 ("Purchase Consideration") which will be fully satisfied by way of the allotment and issuance of 250,000 new ordinary shares to the Vendors in the capital of LB

    Lab ("Consideration Shares") representing 25% of the total enlarged issued and paid-up share capital of LB Lab, credited as fully paid-up and ranking pari passu in all respects with the shares of the same class in the capital of LB Lab. Each Vendor shall be issued and allotted such number of Consideration Shares in accordance with the proportion of Sale Shares held by that Vendor which is acquired by LB Lab under the SPA. Please refer to Appendix B to this Announcement for the shareholding in LB Lab before and after completion of the Proposed Acquisition.

  • (ii) The Purchase Consideration was arrived on a willing-buyer willing-seller basis, privately negotiated and conducted on an arm's length basis between the LB Lab and the Vendors, taking into account, amongst others, the historical profits, financial position, goodwill in the branding of GBPL and the prospective business opportunities arising from the Proposed Acquisition.

• (b) Conditions

  (i)Completion of the Proposed Acquisition ("Completion") is conditional upon, inter alia, the conditions set out in Appendix A to this Announcement (collectively, the "Conditions" and each a "Condition") being satisfied or waived in accordance with the terms of the SPA.

• (c) Completion

  • (i) Completion is expected to take place on a date falling no later than ten (10) business days after the date on which all the Conditions are fulfilled or waived by the Vendors or LB Lab (as the case may be), or such other date as may be mutually agreed in writing by LB Lab and the Vendors ("Completion Date").

  • (ii) The Conditions shall be satisfied on or prior to the date falling sixty (60) days from the date of the SPA at 5.00 p.m., or such other date as may be agreed to in writing by LB Lab and the Vendors, failing which LB Lab (in the case of a Condition to be satisfied by the Vendors), or the Vendors (in the case of a Condition to be satisfied by LB Lab) may, at its option by giving notice to the other party, either:

    • (1) terminate the SPA on the terms and conditions therein, and neither party shall have any claim against the other for costs, damages, compensation or otherwise, save in respect of any antecedent breaches of the terms thereof; and

    • (2) waive the respective Condition(s) which are not satisfied (save for any Condition which cannot be waived by the relevant party

unilaterally) on such terms and conditions acceptable to such party and proceed to Completion.

(iii)LB Lab shall not be obliged to complete the sale and purchase of any of the Sale Shares unless the sale and purchase of all the Sale Shares is completed simultaneously.

4.2

Shareholders' Agreement

Subject to and upon Completion in accordance with the SPA, the SHA will take effect as between the Company, LB Lab and the Vendors. The salient terms of the SHA are as follows:

• (a) the objective of the SHA is to regulate the relationship of the shareholders of LB Lab and the conduct of its business in the spirit of mutual confidence and co-operation;

• (b) the Vendors shall not act or omit to act, or procure that GBPL act or omit to act, in a manner which is inconsistent with his/her shareholding proportion in LB Lab and/or obligations under the SHA, and such obligations in respect of the SHA shall apply to GBPL in respect of their difference in shareholding in GBPL compared to LB Lab, upon Completion;

• (c) LB Lab shall enter into separate service agreements with the Company in respect of management services to be provided by the Company on the terms set out therein;

• (d) the first auditor of LB Lab shall be Mazars LLP;

• (e) the board of LB Lab shall consist of three (3) directors, which the Company shall appoint two (2) directors and the Vendors shall collectively appoint one (1) director;

• (f) the quorum of a board meeting shall be two (2) directors, with at least one (1) director appointed by the Company;

• (g) the quorum for the transaction of business at a shareholders' meeting shall consist of the Company;

• (h) the Company shall have the right of first refusal in respect of any purported transfer of shares in LB Lab by the Vendors;

• (i) the Company shall have drag-along rights to compel the other shareholders of LB Lab to transfer the same proportion of their shares in LB Lab in a sale of its shares in LB Lab to a bona-fide third party purchaser;

• (j) each of the shareholders in LB Lab shall have tag-along rights in respect of any purported transfer of shares in LB Lab to a third-party transferee; and

• (k) in the event of a default by the Vendor(s) of the terms of the SHA, the Company shall have a right to, amongst others, compel the Vendor in default to sell its shares in LB Lab and/or GBPL to the Company at 80% of the respective fair market value - which shall be agreed by the shareholders at first instance, failing which an

independent valuer shall be appointed as expert (and not arbiter) to determine such fair market value.

4.3

Convertible Loan Agreement

Upon Completion in accordance with the SPA, the Company intends to make an investment in LB Lab by way of a grant a convertible loan of an amount of S$650,000 ("Convertible Loan"), and by way of share equity of an amount of S$50,000 to LB Lab, with the intention of funding the extension and expansion of GBPL's products and offerings under LB Lab, including the possibility of setting up a cloud kitchen and developing new products.

The Company and LB Lab have on 18 April 2022 entered into a convertible loan agreement ("CLA") in respect of the terms of the Convertible Loan. The salient terms of the CLA (other than as already stated above) are as follows:

• (a) amongst others, the Proposed Acquisition should have taken place in accordance with the terms and conditions of the SPA as a condition to the disbursement of the Convertible Loan;

• (b) the Convertible Loan shall be issued in one (1) lump sum upon the conditions of drawdown being fulfilled;

• (c) interest at the rate of 5.0% per annum will be charged on the outstanding Convertible Loan from the date of drawdown to the date of repayment or the date of conversion of the Convertible Loan - repayment date shall be a date which is within five (5) years from the date of drawdown of the Convertible Loan or such date as may be extended by LB Lab with the Company's written consent ("Repayment Date") and accrued interest will be paid on the date at the end of each calendar quarter from 30 June 2023 ("Interest Payment Dates");

• (d) LB Lab may repay the outstanding Convertible Loan (including accumulated interest thereon) at any time by giving one (1) month prior irrevocable notice;

• (e) the Company may exercise its rights to convert the Convertible Loan if any event(s) of default are triggered;

• (f) the number of shares in LB Lab to be issued on conversion is based on a total or partial conversion of the total indebtedness of LB Lab under the CLA divided by an exercise price of S$0.065 per share in LB Lab;

• (g) the converted shares shall rank pari passu in all respects with the other existing issued and paid up share capital of LB Lab, save for any dividends, rights, allotments or other distributions, the record date of which calls before the conversion date; and

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