BFW Disclosure notice relating to share buyback S.62

Burger Fuel Worldwide Limited (BFW) Section 62 - Companies Act 1993 Disclosure Document Offer to buy back and cancel 2,820,000 shares from Franchise Brands, LLC Background, nature and terms of the offer BFW is required to provide this Disclosure Document to shareholders in accordance with the requirements of section 62 of the Companies Act 1993 (Act) before the offer is made to buy back and cancel 2,820,000 ordinary fully paid shares in BFW from Franchise Brands, LLC (Franchise Brands) at approximately US$0.25 per share (approximately NZ$0.37 per share) for a total consideration of US$709,332.25 to be paid in 4 instalments over 8 months and funded from BFW's cash reserves. The proposed buy back was the subject of an ordinary resolution considered and passed by the shareholders at the Annual Meeting of shareholders held on 30 August 2018 for the purpose of approving the resulting change in control of JCR Investment Trust and its associated persons under the Takeovers Code. The notice of meeting sent to all shareholders dated 15 August 2018 contained detailed information on the background to and on the nature and terms of the proposed buy back of the shares from Franchise Brands, as well as the nature and implications of the proposed buy back and cancellation for BFW and its shareholders. An independent appraisal report on the merits of the proposal was also provided with the notice of meeting. For the purposes of this Disclosure Document and for ease of reference of shareholders, a brief summary of the proposed buy back is set out below. The proposed buyback is for all the 2,820,000 remaining shares in BFW held by Franchise Brands, which currently holds 4.99% of the total number of voting securities of BFW. Following the end of the collaboration agreement between Franchise Brands and BFW in 2016, Franchise Brands agreed to sell its 10% shareholding in April 2018 for US$1.5 million, which is approximately US$0.25 per share. The buyback offer does not extend to any other shareholders. These shares comprise the balance of the shares held by Franchise Brands following the recent share buyback of 3,143,355 shares at the same price per share. Previously, on 17 July 2018, BFW bought back and cancelled 3,143,355 shares from Franchise Brands representing 5.27% of BFW's total voting securities for US$790,667.75 at the same price of approximately US$0.25 per share. At the time of the announcement on 11 June 2018, it was proposed that BFW would buy back and cancel 3,143,355 shares and the remaining 2,820,000 shares would be purchased by JCR Investment Trust through its controlling interest in the largest shareholder Mason Roberts Holdings Limited and the E&P Foundation Trust. This was due to the Board evaluating BFW's cash position at the time, taking into account BFW's future working capital requirements. The Board concluded that it was comfortable with the initial buyback and with JCR Investment Trust purchase of the balance. However, since then, payment terms have been negotiated with Franchise Brands allowing the purchase to be paid in four instalments over an 8-month period. The agreed payment instalments are as follows; 10th September 2018 - US$235,000.25 5th December 2018 - US$115,000.00 28th February 2019 - US$180,000.00 28th April 2019 - US$179,332.00 The buyback price is at a discount to the current market price, and the price paid by Franchise Brands in 2014, for the entire parcel of shares. Franchise Brands acquired its shares in 2014 for NZ$1.35 per share. The share price was NZ$0.70 as at 05 September 2018. The shares to be purchased from Franchise Brands will be cancelled, reducing the total number of shares on issue from 56,490,195 to 53,670,195. As such, every other shareholder will benefit by gaining an increase in their proportionate equity holding. This benefit arises at a sale price below that at which the shares have been trading. The impact of the increase in control of JCR Investment Trust and its associated persons was discussed in detail in the notice of meeting and the ordinary resolution approving that change in control was passed by the shareholders permitted to vote. No Director has any relevant interest in the shares which are the subject of the buyback. The buyback will occur no less than 10 working days after this Disclosure Document has been sent to shareholders. The text of the director's resolutions under S.61 of the Companies Act 1993 BFW's Directors resolved: 1. The Company, by entry into a Sale Agreement substantially in the form that accompanies this resolution, make an offer to Franchise Brands, LLC. (FB) to acquire 2,820,000 fully paid ordinary shares in BFW (the Shares) held by FB (the buyback). 2. The total consideration payable by the Company to FB for the Shares is USD$709,332.25. This is payable in four instalments over 8 months Payment 1: 10th September 2018 - US$235,000.25 Payment 2: 5th December 2018 - US$115,000.00 Payment 3: 28th February 2019 - US$180,000.00 Payment 4: 28th April 2019 - US$179,332.00 3. The buyback is in the best interests of the Company and is of benefit to the remaining shareholders. 4. The terms of the buyback and the consideration offered for the Shares are fair and reasonable to the Company and to the remaining shareholders. 5. The reasons for the director's conclusions are that: a. The buyback is consistent with the termination of the collaboration agreement, and the ending of the strategic alliance, with FB. b. The buyback presents an opportunity to deliver a benefit to BFW's shareholders through the cancellation of the Shares, a reduction in the total number of BFW shares on issue, and the increase in each remaining shareholder's proportionate shareholding that will follow. c. The buyback price is at a discount to the current market price, and the price paid by FB, for the Shares. 6. The shares will be cancelled by the Company immediately upon completion of the buyback. 7. The Company send: a. to each shareholder the Disclosure Document, as required by section 61(5) of the Act and containing the information required by section 62 of the Act, substantially in the form that accompanies this resolution; and b. to NZX Limited the Acquisition Notice, as required by, and containing the information set out in, NZAX Listing Rule 7.6.2, substantially in the form that accompanies this resolution. 8. Not less than 10 working days after the Disclosure Document has been sent to each shareholder and at least three business days (as defined in the NZAX Listing Rules) after the giving of the Acquisition Notice, the Company enter into the sale agreement with FB relating to its acquisition of the Shares and otherwise complete the acquisition of the Shares. If you have any questions regarding this Disclosure Document, please contact BFW's Company Secretary Mark Piet on Mark.Piet@Burgerfuel.com Mark Piet Company Secretary Burger Fuel Worldwide Limited 5th September 2018 End CA:00323426 For:BFW Type:CORPACT Time:2018-09-05 14:40:16