Acquisition of 100% of Ace Genetics and Potential Specific Repurchase of Shares LABAT AFRICA LIMITED (Incorporated in the Republic of South Africa) (Registration number 1986/001616/06) (“Labat Africa” or “the Company”) ISIN Code: ZAE 000018354 Share code: LAB VOLUNTARY ANNOUNCEMENT RELATING TO THE ACQUISITION OF 100% OF AFRICAN CANNABIS ENTERPRISES (PTY) LTD (“ACE GENETICS”) AND POTENTIAL SPECIFIC REPURCHASE OF SHARES Shareholders are advised that following a satisfactory due diligence investigation, Labat has concluded an agreement with the vendors of Ace Genetics (“Agreement”) in terms of which it will acquire 100% of the shares in and claims against the Cape-based cannabis genetics company for a purchase consideration of R1 804 001, to be settled by the issue of 1 804 000 Labat shares at an issue price of R1.00 per share (“Acquisition”). The effective date of the Acquisition is 4 December 2020. The vendors are not related parties to Labat as defined in the JSE Listings Requirements. Rationale for the Acquisition Labat requires a dependable and continuous flow of raw materials to ensure it meets the growth in demand over the coming years and Ace Genetics, which grows its product in various regions of the Western Cape, has an established capability to supply the entire Labat grow facility raw materials. The Acquisition furthermore provides the Company with access to the vendors’ collective 100 years of growing experience and this is very attractive to Labat as the vendors are well positioned to assist with the implementation of all Labat’s grow activities and to provide support and assistance with the Industrial Hemp roll out, which will add significant value to the supply chain. Ace Genetics has over 100 strains and sub-strains under cultivation with THC and CBD levels of up to 33% and up to 20% respectively and is rapidly becoming the leading genetics company in Africa. The company also has a large number of interested customers in the USA, Canada and Europe who are wanting to procure the seed and cuttings. The Acquisition brings to Labat a reliable and credible genetics partner and Labat is pleased to on-board a group of leading experts in the cannabis industry who are committed to ensuring South Africa takes its rightful place on the world stage in the field of cannabis innovation and scientific excellence. Put Option and Potential Specific Repurchase of Shares In the event that the 30-day VWAP of the Labat shares on the JSE is less than R1.00 on the first anniversary of the signature date of the Agreement (“Determination Period”), Topfruit (Pty) Ltd (“Topfruit”) the largest of the three vendors of Ace Genetics, shall, for a period of 30 (thirty) days after the last day of the Determination Period, have the right to require Labat to purchase all or the remaining portion of the 900 000 Labat shares issued to it in settlement of the acquisition of its 49% interest in and claims against Ace Genetics for a purchase consideration of R1.00 per share (“Put Option”). Categorisation and Circular The Acquisition is not a categorised transaction in terms of section 9 of the JSE Limited Listings Requirements and this announcement is made on a voluntarily basis. The potential specific repurchase of shares arising as a result of the Put Option will, however, require shareholder approval and it is intended that the required approval will be sought on the same day as the forthcoming AGM. Johannesburg 09 December 2020 Sponsor AcaciaCap Advisors Proprietary Limited Date: 09-12-2020 02:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.