LABAT AFRICA LIMITED - Detailed Cautionary Funding Agreement between Labat & USD based GR Global Ventures LLC, Loan Shares & Circular

Detailed Cautionary Funding Agreement between Labat & USD based GR Global Ventures LLC, Loan Shares & Circular

LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
(“Labat Africa” or “the Company”)
ISIN Code: ZAE000018354 Share code: LAB


DETAILED CAUTIONARY ANNOUNCEMENT RELATING TO A FUNDING AGREEMENT BETWEEN LABAT AFRICA
AND USA BASED GR GLOBAL VENTURES LLC, LOAN SHARES FROM AN ASSOCIATE OF DIRECTORS AND
CIRCULAR TO SHAREHOLDERS


Labat Africa is pleased to announce that it has signed a put option agreement (“Agreement”) with GR
Global Ventures LLC (“GRGV”), a United States of America (“USA”) based investment group, to provide
the Company with up to R300 million in committed equity capital in cash over the next 36 months. The
access to capital comes at an opportune time for Labat Africa in line with its strategy on developing its
Cannabis focussed health care business.

The funding will support the growth of the Labat Healthcare business, with a particular focus on the
cannabis business.

GRGV has agreed to commit an amount of up to R300 million (the “Capital Commitment”) in cash within
a maximum of three years in exchange for new ordinary shares in Labat Africa. In addition, the
agreement provides for the issue of 30 million warrants to GRGV at a price of R0.50 (Fifty) cents (more
than a 100% premium on the current share price of Labat Africa).

This Capital Commitment will be released based on drawdowns by Labat Africa in the form of put
options that Labat Africa has the right to exercise against GRGV at its sole discretion. The amount of the
drawdowns will also be decided by the Company and be dependent upon certain parameters such as
the Company’s trading volume during the previous 15-day period and the price per share during the
forward-looking 30-day pricing period.

The strike price of the put option is determined by the volume weighted average price (VWAP) of Labat
Africa’s shares during such 30-day pricing period on each put option exercise.

This funding commitment will allow Labat to deploy cash on an as-needed basis. The funding
commitment will strengthen the Company’s balance sheet and is intended to support the
commercialisation of the Company’s various initiatives, including:

•   Research project to replace Opioids with Cannabis for pain management through its subsidiary
    BioData;
•   The ramping up of the distribution of CBD infused “Ace and Axle” smokables;
•   The establishment of a Hemp Processing facility; and
•   The roll out of additional CannAfrica retail stores in South Africa.

Both Labat Africa and GTGV view this capital allocation not only as an investment into the Company
but also as a starting point for a long-term strategic partnership to advance Labat Africa’s promising
projects in the field of Cannabis related healthcare and lifestyle as well as the development of the latest
treatments for complex diseases. GRVG’s investment will accelerate Labat Healthcare projects in all
aspects. The Company’s business plan until 2025 allows for the introduction of several highly profitable
original drugs and other finished dosage forms to the domestic market, an entry into the production of
active pharmaceutical ingredients, and the launch of the new drugs.

The legal agreement remains subject to Board and other regulatory approvals. The agreement also
provides for loan shares, from the largest shareholder in the group, which is controlled by two executive
directors of Labat. This is in the process of being put into place. A further announcement will be made
in this regard.

Circular to shareholders
A circular to shareholders will be prepared to approve a Specific Authority to issue shares for cash as
well as the issue of 30 million warrants to GRGV at a price of R0.50 (Fifty) cents per share. A further
announcement will be made in due course.

Cautionary Announcement
Shareholders are advised to exercise caution until a further announcement is made.

Johannesburg
2 December 2021

Sponsor
AcaciaCap Advisors Proprietary Limited

Date: 02-12-2021 05:41:00
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