BFG – BurgerFuel USA market update

BurgerFuel USA market update Burger Fuel Group Limited (BFG) have provided the market with updates from time to time regarding the future of BurgerFuel USA. At the recent BFG shareholders meeting on 2 September 2020, shareholders were advised that the store in Indianapolis had not yet reopened from its Covid-19 lock-down, and that BFG was in discussions with Chris Mason about how best to resolve matters. Settlement of outstanding issues and share buy backs The directors of BFG advise that given the ongoing issues relating to Covid-19 that the USA is facing and in resolution of all outstanding issues that have arisen between Chris Mason (and his associated entities) and BFG (and its subsidiaries) as to obligations and amounts claimed to be outstanding or owing under earlier arrangements entered into in 2018, the following has been agreed: 1) To settle an outstanding debt claimed to be owing in relation to BurgerFuel USA, BFG will acquire from the Mason Family Trust 1,538,461 fully paid ordinary BFG shares for no cash payment (but attributing a nominal value of NZ$0.39 cents per share, at an agreed settlement amount of NZ$600,000). 2) BFG will acquire from the Mason Family Trust 1,794,871 fully paid ordinary BFG shares for consideration of NZ$0.39 cents per share for a total cash payment of NZ$700,000. 3) The store in Indianapolis will close permanently and Chris Mason will cease being the BurgerFuel USA Master Licensee and will relinquish all rights to operate BurgerFuel in the USA. As previously disclosed to the market, Mason Roberts Holdings Limited (MRHL) (a bare trustee company) is the registered holder of a total of 39,962,644 fully paid ordinary BFG shares. This includes 6,586,309 fully paid ordinary BFG shares beneficially owned by Christopher Simon Mason and Christopher John Mills as trustees of the "Mason Family Trust". 3,333,332 of those shares will be acquired by BFG under the terms of the settlement described above. Effects of transactions The transactions described above will result in the buy back and cancellation of 3,333,332 fully paid ordinary BFG shares representing 6.2% of the 53,670,195 BFG shares currently on issue. Following the buy back and cancellation: o the total number of BFG shares on issue will be 50,336,863. o Chris Mason (via the Mason Family Trust) will beneficially own 3,252,977 fully paid ordinary BFG shares (held on trust by MRHL) representing 6.5% of the BFG shares then on issue. NZX Waiver A waiver has been granted by NZX Regulation. The waiver relates to NZX Listing Rule 4.14.1(b)(ii)(A), to the extent that this Rule prohibits BFG from making an offer to acquire its own equity securities from MRHL (as it is technically an associated person of one of BFG's directors Josef Roberts who is also the sole director of MRHL). As noted above, MRHL holds the shares the subject of the buybacks as a bare trustee for the Mason Family Trust. Josef Roberts however has no beneficial interest in the shares the subject of the buyback offers. A copy of that waiver is being released to the market today. Conclusion The BFG board of directors have concluded that they consider the settlement as outlined to be in the best interests of all shareholders. The settlement avoids the likelihood of legal proceedings commencing between the parties which could involve considerable on-going management time, substantial legal costs, and an uncertain outcome. At this time the Covid-19 environment in the USA makes the development of BurgerFuel in that country extremely difficult and unlikely to succeed. These circumstances and Chris's efforts to establish BurgerFuel in the USA have been recognised in arriving at the settlement described in this announcement. Burger Fuel Group Limited 23 October 2020 End CA:00361988 For:BFG Type:MKTUPDTE Time:2020-10-23 11:51:43