JustKitchen Announces Proposed Going-Private Transaction

Vancouver, British Columbia--(Newsfile Corp. - May 23, 2023) - Just Kitchen Holdings Corp. (TSXV: JK) (FSE: 68Z) ("JustKitchen" or the "Company"), an operator of ghost kitchens specializing in the development of delivery-only food brands for customers, announces that it has entered into an arrangement agreement (the "Arrangement Agreement") among the Company, JustKitchen Co. Ltd. ("JK Taiwan"), the Company's wholly-owned Taiwanese subsidiary, and JF Investment Co., Ltd. (the "Purchaser"), pursuant to which the Purchaser will acquire (the "Transaction") all of the issued and outstanding common shares of the Company (the "Common Shares") by way of a statutory plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia) (the "BCA").

Under the terms of the Arrangement, each holder of Common Shares (the "Shareholders"), other than the Electing Shareholders and the Purchaser Shareholders (as each term is defined below), will receive cash consideration of CAD $0.09 for each Common Share held (the "Cash Consideration"). The Cash Consideration represents a 73.1% premium to the 20-day volume-weighted average price per Common Share on the TSX Venture Exchange (the "TSXV") for the period ending on May 19, 2023, and a 20.0% premium to the closing price on May 19, 2023.

Pursuant to the terms of the Arrangement Agreement, upon closing the Transaction, all of the continuing assets of the Company will be transferred to JK Taiwan pursuant the terms and conditions of an assignment and assumption agreement to be entered into between the Company and JK Taiwan. Shareholders will be provided with the option to elect not to receive the Cash Consideration with respect to their Common Shares and instead become shareholders of JK Taiwan (the "Electing Shareholders") and hold such number of JK Taiwan shares (the "JK Taiwan Shares") that will result in the in such Shareholder holding the same equity interest in JK Taiwan following completion of the Transaction as the Shareholder held in the Company immediately prior to the completion of the Transaction.

The Purchaser is a Taiwanese company incorporated and jointly owned by Jason Hsin-How Chen, CEO and a director of the Company, Freddie Hsi-Liang Liu, a director of the Company, Jerry Tai-Han Chiu and Sheng Min Su, who in the aggregate hold 14,440,001 Common Shares (collectively, the "Purchaser Shareholders").

Under the Arrangement, each vested restricted share unit of the Company ("RSU") outstanding immediately prior to the completion of the Transaction shall be exchanged for one Common Share. In addition, each option to purchase a Common Share ("Company Option") outstanding immediately prior to the completion of the Transaction will automatically vest and be cancelled in exchange for a cash payment from the Company equal to the amount (if any) by which CAD $0.09 exceeds the exercise price of such Company Option. All unvested RSUs and performance warrants of the Company outstanding immediately prior to the completion of the Transaction will be cancelled.

In connection with the Transaction, the Purchaser has also agreed to loan funds to JK Taiwan on terms and conditions to be mutually agreed between the parties to fund its operations until closing of the Transaction.

Transaction Highlights

The board of directors of the Company (the "Board") has unanimously determined (with Jason Chen and Freddie Liu abstaining) that the Transaction is in the best interests of the Company and is fair to its shareholders. The determination of the Board was made upon the recommendation of a special committee of independent directors (the "Special Committee") and after consideration of the advice of legal and financial advisors to the Special Committee and the Company.

The conclusions and recommendations of the Special Committee and the Board have been based on a number of factors, including (without limitation) the following:

• Premium to Participating Shareholders - the all-cash consideration payable to shareholders other than Electing Shareholders ("Participating Shareholders") represents a significant premium to Participating Shareholders:
  • 20.0% premium to the closing price per Common Share on the TSXV on May 19, 2023 and a 73.1% premium to the 20-day volume-weighted average price per Common Share on the TSXV for the period ending on May 19, 2023.

• Certainty of Value and Liquidity - the payment to Participating Shareholders under the terms of the Arrangement Agreement will be all cash, which provides certainty and immediate liquidity to Participating Shareholders.

• Alternative Transaction - the Company has been unable to attract strategic investment or a business combination or sale of its business from a third party. Additionally, the Company is in urgent need of working capital, with the Purchaser agreeing to fund JK Taiwan's ordinary course working capital obligations until closing of the Transaction, including assuming any and all outstanding liabilities of the Company as at closing of the Transaction.

• Option to Retain an Interest in the Business - holders of Common Shares are entitled to elect to receive, in lieu of the Cash Consideration, JK Taiwan Shares, such that they may retain their pro rata interest in the business of the Company. It is intended that JK Taiwan will seek a listing in Taiwan, as the Purchaser believes Taiwan will be a more relevant market for JK Taiwan's south-Asian operations. The Purchaser also believes that a listing in Taiwan will provide greater awareness and financing opportunities for JK Taiwan.

• Fairness Opinion - Evans & Evans, Inc. has provided the Special Committee with an opinion to the effect that, as of May 19, 2023, the consideration to be received by Shareholders (other than the Purchaser Shareholders) in the Transaction is fair, from a financial point of view, to such holders, subject to the respective limitations, qualifications, assumptions and other matters set forth in such opinion.

Transaction and Shareholder Meeting Details

The Transaction will be implemented by way of the Arrangement under the BCA. The completion of the Transaction will be subject to approval of the holders of Common Shares and Options at a special meeting of securityholders (the "Special Meeting"). Certain directors, officers and significant shareholders (who hold in the aggregate approximately 9.7% of the issued and outstanding Common Shares on a non-diluted basis, and 40.7% of the issued and outstanding Options) have entered into Voting, Support & Election Agreements with the Purchaser, pursuant to which they have agreed, among other things, to vote their Common Shares and Options in favour of the Transaction, subject to certain exceptions, and to elect to be an Electing Shareholder.

The Transaction will constitute a "business combination" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Transaction will therefore require the approval of the holders of a majority of the Shareholder votes cast at the Special Meeting excluding those Common Shares held by the Purchaser Shareholders and any other person required to be excluded for the purpose of such vote under MI 61-101, in addition to approval by 66 2/3% of all votes cast at the Special Meeting. The Transaction is also subject to the approval of the Supreme Court of British Columbia, in addition to certain regulatory approvals and closing conditions customary to a transaction of this nature.

The Arrangement Agreement includes customary provisions relating to non-solicitation, subject to customary "fiduciary out" provisions that entitle the Company to consider and accept a superior proposal if not matched by the Purchaser.

Further details regarding the terms of the Transaction are set out in the Arrangement Agreement, which will be publicly filed by the Company under its profile at www.sedar.com. Additional information regarding the terms of the Arrangement Agreement, the background to the Transaction, the rationale for the recommendations made by the Special Committee and the Board, how to become an Electing Shareholder, and how shareholders can participate in and vote at the Special Meeting will be provided in the management information circular for the Special Meeting which will also be filed at www.sedar.com. Shareholders are urged to read these and other relevant materials when they become available.

Advisors

McMillan LLP is acting as legal advisor to the Company, and Sandhu ESG Law is acting as legal advisor to the Purchaser.

ABOUT JUSTKITCHEN

Just Kitchen is primarily an operator of ghost kitchens specializing in the development and marketing of proprietary and franchised delivery only food brands for customers and businesses. The Company currently operates in Taiwan, Hong Kong, the Philippines and Malaysia. It has also signed an agreement that will allow JustKitchen to sell several of its proprietary food brands in Japan and it has also signed a brand swap agreement in India. Where appropriate, JustKitchen utilizes a hub-and-spoke operating model, which features advanced food preparation taking place at larger hub kitchens and final meal preparation taking place at smaller spoke kitchens located in areas with higher population densities. The Company combines this operating model with online and mobile application-based food ordering via its proprietary mobile food ordering app and other third-party ordering apps. Delivery is fulfilled by third-party delivery companies, to minimize capital investments and operating expenses and reach more customers in underserved markets. The Company's other business, JustMarket, is an e-commerce grocery delivery platform that allows customers to purchase groceries for delivery or add select grocery items to meals ordered through JustKitchen.

For more information about the Company, please visit investors.justkitchen.com. JustKitchen's final prospectus, financial statements and management's discussion and analysis, among other documents, are all available on the Company's profile page on SEDAR at www.sedar.com.

FORWARD-LOOKING STATEMENTS

Certain statements included in this press release may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. More particularly without limitation, this press release contains forward-looking statements and information regarding the anticipated benefits of the proposed Transaction for the Company, its employees, business partners, shareholders and other stakeholders, including the anticipated timing of the Special Meeting and of the completion of the Transaction, and the intention to seek a listing for JK Taiwan in Taiwan. Except as may be required by Canadian securities laws, the Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from JustKitchen's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, JustKitchen cannot guarantee that any forward-looking statements will materialize, or if any of them do, what benefits JustKitchen will derive from them.

In respect of forward-looking statements and information concerning the anticipated benefits and timing of the completion of the proposed Transaction, JustKitchen has provided such statements and information in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the ability of the parties to receive, in a timely manner, the other conditions for the completion of the Transaction, and other expectations and assumptions concerning the proposed Transaction. The anticipated dates indicated may change for a number of reasons, including the necessary regulatory, court and securityholder approvals, the necessity to extend the time limits for satisfying the other conditions for the completion of the proposed Transaction or the ability of the Board to consider and approve, subject to compliance by JustKitchen of its obligations under the Arrangement Agreement, a superior proposal for JustKitchen. Although JustKitchen believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct, that the proposed Transaction will be completed or that it will be completed on the terms and conditions contemplated in this news release. Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.

Risks and uncertainties inherent in the nature of the proposed Transaction include, without limitation, failure of the parties to satisfy the conditions for the completion of the Transaction; termination of the Arrangement Agreement in certain circumstances; failure to complete the Arrangement or if completion of the Arrangement is delayed, there could be an adverse effect on the Company's business, financial condition, operating results and the price of the Common Shares; the Company is restricted from taking certain actions while the Arrangement is pending; the Company's directors and officers may have interests in the Arrangement that are different from those of Shareholders; Shareholders will no longer hold an interest in the Company following the Arrangement; and Electing Shareholders will receive shares of a private entity organized under the laws of Taiwan. Consequently, the Company cautions readers not to place undue reliance on the forward-looking statements and information contained in this news release. The Company does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

CONTACT INFORMATION

Just Kitchen Holdings Corp.
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
V6C 2V6

Jason Chen, CEO
Toll-Free: 1-855-JST-KCHN (1-855-578-5246)
E-mail: ir@justkitchen.com

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/167081