Yum! Connect Australia Pty Ltd entered into a Scheme Implementation Deed to acquire Dragontail Systems Limited (ASX:DTS) from Alceon High Conviction Absolute Return Fund, managed by Alceon Liquid Strategies Pty Ltd, Eldridge Industries LLC, Goudy Park Management, Llc, Yehuda Shamai and others for AUD 67.2 million on May 27, 2021. The Transaction is to be implemented by way of a share scheme of arrangement (Scheme), is not subject to a finance condition. Yum! will acquire 285.988462 shares of Dragontail and 111.53846 convertible preference shares to be converted into an equal number of ordinary shares at a price of AUD 0.235 per share. Under the Scheme, Alceon High Conviction Absolute Return Fund and Eldridge Industries LLC, subject to shareholder approval (as required), each convert their DTS convertible preference shares (CP Shares) into DTS Shares prior to the Court-convened shareholder meeting for the Scheme. Consideration will be paid in cash and funded from exiting cash reserves. Under the Scheme, all outstanding Dragontail options will be cancelled. On the Implementation of Scheme, Dragontail must take all actions necessary to appoint the persons nominated by Yum! as new directors of Dragontail and new directors of each member of the Dragontail Group and procure that all Dragontail directors resign from the board. Break fee is AUD 0.935 million for Yum! and Dragontail, both in case of termination by either of them. Yum will make changes in e DTS Board and management team along with delisting of DTS from ASX.

The Dragontail Board of Directors unanimously recommends that all Dragontail shareholders vote in favour of the Scheme in the absence of a superior proposal and subject to an Independent Expert expressing an opinion that the Scheme is in the best interests of Dragontail shareholders. The scheme is subject to approval from Australian Federal Court, number of regulatory approvals and waivers, including other regulatory approvals in certain jurisdictions where Dragontail operates. The scheme is also subject to no temporary restraining order, preliminary or permanent injunction or other judgment, order or decree issued by any court of competent jurisdiction or Government Agency or other legal restraint or prohibition preventing or materially restricting the Scheme or its implementation is in effect on the Second Court Date, the Independent Expert provides the draft Independent Expert's Report to Dragontail, the Court orders the convening of the Scheme Meeting under section 411(1) of the Corporations Act, approval of shareholders of Dragontail, Court Order lodgement, No Material Adverse Event, No Prescribed Occurrence, No change of Dragontail Board recommendation, Conversion of Convertible Preference Shares, Cancellation of Options, No Competing Proposal and other conditions. As per update on June 24, 2021, extraordinary general meeting of shareholders of Dragontail Systems Limited for approval of CPS conversion is scheduled to take place on July 26, 2021. On July 16, 2021, The Federal Court of Australia (Court) has today made orders relating to convening a meeting of DTS ordinary shareholders to consider and vote on the Scheme. BDO Corporate Finance (East Coast) Pty Ltd, has concluded that the Scheme is fair and reasonable and DTS Directors unanimously recommend shareholders to vote in the absence of a Superior Proposal. Effective Date of the Scheme is August 12, 2021. The Scheme meeting will be held on August 23, 2021 and Scheme will be implemented in September 2021. Yum! Brands estimates that this all-cash acquisition will have an immaterial impact to its 2021 financial results. July 21, 2021 was set to record date. As of August 30, 2021, The Second Court Hearing to consider approval of the Scheme has been adjourned. As on August 31, 2021, Federal Court of Australia approved the Scheme. DTS ordinary shareholders will receive Scheme consideration of AUD 0.235 cash for each DTS ordinary share they held as on September 2, 2021. As on August 31, 2021, The Scheme is expected to be implemented on September 7, 2021.

Jason Marcus and Helen Jin of Thomson Geer acted as legal advisors to Dragontail Systems Limited. Kate Jefferson of Baker & Mckenzie acted as legal advisor to Yum! Connect Australia Pty Ltd. Advanced Share Registry Limited (ASX:ASW) acted as registrar to Dragontail Systems Limited. BDO Corporate Tax (WA) Pty Ltd has acted as the Australian tax adviser and Kost, Forer, Gabbay & Kasierer has acted as the Israeli tax adviser to DTS. I.B.I. Trust Management has acted as the Withholding Agent to DTS. David McCourt, Kate Nieland and David Zyschki of BDO Corporate Finance (East Coast) Pty Ltd acted as fairness opinion provider to DTS.